Secured vs unsecured loans: what is the difference?
By 8Q Solutions Team ·
Loans fall broadly into two groups.
Unsecured loans
Examples include most personal loans and some business loans. You do not pledge an asset. The lender relies on your income, existing obligations and credit history. Because the lender has no security, terms can be stricter for some applicants.
Secured loans
Examples include home loans and loans against property. An asset is mortgaged or pledged to the lender. Secured loans can allow larger amounts or longer tenures, but the asset is at risk if repayments are missed.
Choosing between them
- Consider the purpose and how long you need to repay.
- Consider whether you are comfortable pledging an asset.
- Compare the full cost — interest, fees and charges — not only the EMI.
Learn more about personal loans and loans against property, or use the EMI calculator to plan repayments.
This article is general information, not financial advice. 8Q Solutions is not a lender; lenders decide eligibility, rates and terms.