Let's have a look at the different loan types.
Secured
Secured loans, which include mortgage loans are loans that are backed by some type of collateral. In the case of a mortgage loan, the collateral is the property itself. Other types of assets include your car, and even your savings plan.
Unsecured
Unsecured loans are the opposite of secured loans, or loans that do are not backed up by collateral like your home, car, or savings plan. Unsecured loans are generally given out on basis of your credit score.
Risk Level
Unsecured loans are much more risky for the lender, as there is no assets to take if the borrower defaults, and is no longer able to make any payments.
Interest Rates
Because of the nature of unsecured and signature loans, the interest rate is usually much higher, do to the level of risk the lenders must undertake in order to provide the capital.
These are the primary variations of loans, you can get more information on loan types at Loanshire
Secured
Secured loans, which include mortgage loans are loans that are backed by some type of collateral. In the case of a mortgage loan, the collateral is the property itself. Other types of assets include your car, and even your savings plan.
Unsecured
Unsecured loans are the opposite of secured loans, or loans that do are not backed up by collateral like your home, car, or savings plan. Unsecured loans are generally given out on basis of your credit score.
Risk Level
Unsecured loans are much more risky for the lender, as there is no assets to take if the borrower defaults, and is no longer able to make any payments.
Interest Rates
Because of the nature of unsecured and signature loans, the interest rate is usually much higher, do to the level of risk the lenders must undertake in order to provide the capital.
These are the primary variations of loans, you can get more information on loan types at Loanshire