Secured Vs Unsecured Loans; How Do They Differ?

Know the difference before you apply!

When it comes to borrowing, it’s a good idea to understand the various types of loan on offer. Loans differ based on interest rates, tenure, choice of lender from where the loan is to be taken and if is is secured or not.

What’s collateral and why does one need to provide any? That’s what Secured loans are about, and here’s what differentiates them from Unsecured loans.


Secured Loans

You can avail a secured loan by using any valuable asset you own, as collateral. It can be a car or house etc. You will need to transfer the title or deed for the collateral to the lender/loan provider. The collateral is held by the lender until you pay the loan off. In the unfortunate event that you cannot clear the loan the lender can take possession of the collateral and even sell it, adding the proceeds of the sale to the outstanding debt.

Secured loans typically offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans. The collateral is used as security by the lender to ensure repayment of the money borrowed.


Unsecured Loans

Unsecured loans, unlike secured loans, do not require you to keep any collateral. This means that the loans are given by the lender/provider based on the borrower’s financial stability and credit history.

The interest rate and tenure is fixed and rates could be higher than those offered for loans against collateral. The approval process does tend to be faster as compared to Secured loans since there is less documentation involved.

The limit to borrow is lower compared to Secured loans as no collateral is given by the borrower.

At the same time the level of risk faced by the lender is high as no collateral is kept as security. To protect against the possibility of nonpayment, lenders look for protection via higher interest rates and a manageable loan size.


Loan Singh’s personal loan process is completely online and you can apply directly on

Loan Singh’s Digital Lending Platform introduces lenders and borrowers to each other. Credit-worthy borrowers are selected with the help of our ‘Seynse Score’. Borrower profiles are shared with Lenders and they decide who they would like to lend to.

Both borrowers and lenders can track their EMI status on personal online dashboards.

It is easily the best Digital lending solution for low interest rate loans with no CIBIL score check.

Loan Singh helps you solve your financial needs. Call us on 18008435353 or drop an email to

You can also leave your comments below.


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