Secured loan is a better option than an unsecured loan. Secured loan are defined as loans against property. They have low rate of interest and have a small monthly repayment. The major difference between a secured and unsecured loan is that a secured loan requires your property as collateral while no collateral is offered in unsecured loan.
Secured loan is more preferred by lenders than unsecured loan, consequently they are easily approved by lenders than unsecured loan. This is because of absence of collateral in unsecured loan. Lenders have an insecurity to lend you money due to the risk of losing their loan amount, incase you fail to pay to pay him back.
Rate of interest is negotiable in secured loan as you are offering your property to the creditor. Higher is the valuation of property; lower would be the rate of interest. However it's not case with unsecured loan where one has to pay high rate of interest with large monthly repayments. You also enjoy benefit of long repayment duration in secured loan. The repayment period could sometimes exceed up to 25 years.
Secured loan can be easily availed even you have a poor credit record because of the presence of collateral in secured loan. Whereas in unsecured loan things are contrary. It's not easy to get an unsecured loan if you have a poor history. However there are some lenders who offer loan on your bad credit also, but charge very high interest.
There is lot of information one can find on internet, regarding secured and unsecured loan. It's advice able to make a complete study of both the loans to understand their needs and requirements.
Author:
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. She has done her masters in Business Administration and is currently assisting seek-uk as a finance specialist.
For more information please visit:
http://www.seek.uk.com
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