A personal loan is a type of debt, usually provided by the bank or a financial service provider, which the borrower agrees to pay back with interest over a predetermined period of time. There are many variants of a personal loan, but they all fall into two categories secured and unsecured. Discussed below are the main differences between the two types of loans.
Secured Personal Loan
A secured personal loan is one that is tied to any of your properties. You will have to offer an asset that you own as collateral to get approved of the loan. The amount that you will be allowed to borrow will be based on the appraised value of that particular asset. The only disadvantage of this type of loan is that, should you default on a payment, that bank will be legally obliged to sell the collateral and use the proceeds to settle your outstanding balance. On the other hand, a secured personal loan is a better choice than an unsecured personal loan due to the following reasons [Read more…]