Secured vs. Unsecured Loans | All about finance & Insurance

There are many types of loans out there, but they can generally be divided into two categories: secured and unsecured loans. Some experts recommend one kind over the other, but most generally agreed that both can be good in certain situations and under certain circumstances. This latter opinion is the correct one, as there are many times when a secured loan is really the best and only options, while there are many others where it?s easier and smarter to just get an unsecured loan. How can you tell the two cases apart and make the right decision that your situation warrants? Hopefully this guide can help you to decide.

What They Mean

First of all, get an understanding of what each of these types of loans will mean for you.

Begin with secured loans: they require you to give some sort of security to ensure that repayment will be made. Oftentimes the security will be something like your house or car, or something valuable to that effect. Gold and jewelry are also used as security.

Secured loans are better in some ways because they offer lower interest rates and potentially longer repayment periods. For that reason, these loans are usually taken out for huge amounts of money and important purposes. They also require a more demanding application process, and not everyone is usually qualified to receive one of these.

Unsecured loans are a different matter. The biggest difference is in the fact that no security is required. You are given the loan because the lender (after looking at your financial history) trusts that you will repay. You don?t have to give them anything.

This also means higher interest, shorter durations, but ultimately an easier loan process. Just about anyone can qualify to get?open door loans?or other similar unsecured loans just as long as they don?t have a terrible credit history. Best of all, you can often get the money you need in a matter of days; with some loans like open door loans, that wait period can be just a few hours.

Choosing Between Secured and Unsecured

Which loan you choose depends on what you need the loan for, how big you want the loan to be, and how long you want to go without fully repaying. If you want money for only a short period of time, then get open door loans and other unsecured loans. If you want a big loan for something like an investment or a down payment, stick with the safer and longer-term option. Once you understand these two types of loans, it?s much easier to make your decision.

penn state football mt rainier national park rose parade mount rainier national park drop dead gorgeous ticket city bowl 2011 nfl playoff schedule