1. Secured loans are backed by a collateral or security like house or car whereas unsecured loans have no collateral or security.
2. Secured loans have a lower rate of interest as compared to unsecured loans.
3. Unsecured loans are typically of short tenures whereas secured loans can be of medium to long tenures.
4. Unsecured loans offer smaller amount of money to borrow whereas, in secured loans, the amount depends on the value of the collateral/security offered.
5. Home loan, car loan and loan against security are examples of secured loan and personal loan, credit card outstanding are examples of unsecured loans.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
