Want to know the difference between Secured loan Vs Unsecured loan? Read our guide to help understand the pros and cons and find an option that suits you. For more details visit https://www.hdfc.com/blog/all-you-wanted-to-know-about-loan-against-property/
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Secured Loan vs. Unsecured Loan
If you have been shopping around for a loan you have probably heard the terms unsecured and secured loans. Do you know the difference? Do you know which type that you need? Do you know which type you would qualify for?
It's difficult many times for the average consumer to wade through all of the terminology and have a real idea of what they need. Secured and unsecured loans can be broken down into really simple terms for you.
Secured Loan vs. Unsecured Loan: What is What?
Unsecured loans are those that do not need to be secured by anything, such as your home. With these loans, the lender believes that you will be able to repay the amount as promised. Unsecured loans are not difficult to come by, but you do have to have a good credit history, a low debt to income ratio, and you need to be able to provide your financial stability.
Secured loans are different in that the lender requires you to secure the loan with something, such as your home or your car. What this means is that you are providing collateral to the lender, which means if you don't pay they have rights to this object. Secured loans are more common as many people don't have the credit or the funds to get an unsecured loan and for many these are more appealing because they feature lower interest rates.
What type of loan is best for you depends on what sort of loan you are looking for. If you just need a personal loan for a couple thousand dollars to pay off a couple medical bills you may be able to do an unsecured loan if you have a decent credit history and you have a low debt to income ratio.
Secured Loan vs. Unsecured Loan lends themselves to different things. In most cases those life changing purchases such as homes and cars are secured and everything else may fall under unsecured if you have the credit history to back it up. There are pros and cons to both types of loans; you simply need to choose the variety that is best for you.
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