Insurance

Aug 28 2018

Secured vs, unsecured loans.#Unsecured #loans

Secured vs. Unsecured Loans

If you’re considering applying for a loan or line of credit to help with a major purchase, you have a choice between secured and unsecured lending options. Secured loans and lines of credit are secured against your assets, resulting in higher borrowing amount and lower interest rates. Unsecured loans allow for faster approvals since collateral is not required.

When to consider unsecured loans and lines of credit

The main advantage of an unsecured loan is faster approvals and less paperwork. Unsecured loans are generally harder to obtain because a better credit score is required, since your loan would not be secured by any assets or collateral.

While unsecured loans might be obtained more quickly, it’s important to remember you’ll likely pay a higher interest rate. The four most common reasons why clients choose unsecured loans are for buying a car, home renovations, medical bills and education costs, and debt consolidation.

  • Car loans take less time to process than a secured loan, and interest rates are very competitive
  • Taking out an unsecured personal loan for home renovation projects is ideal, because you can access funds quickly to complete projects with predictable costs
  • For ongoing expenses such as paying tuition or covering the cost of medical bills, you may be interested in an unsecured personal line of credit

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