There are many people I work with who are confused by the terms ‘secured’ vs ‘unsecured’ when it comes to loans. As such, I want to go over these definitions as to how they apply to those looking to take out a 3000 secured loan (yes, get a cup of coffee unless you are a financial dork like me – and I promise that I will try to make this as quick and painless as possible. Yes, understanding this can help you a great deal, so let’s see if we can get through this in a few minutes).
What is the difference between 3000 Secured Loans and Unsecured Loans?
First, let’s look at the definitions of both ‘secured’ and ‘unsecured’:
- Secured Loan – a loan that is back by capital pledged to support a loan in case of payee default. This jargon essentially means this: you have to sign over your rights to an asset (home, car, stocks, or anything that has value and can be sold easily) to the lender. If you can’t pay your loan back then they will assume ownership of what used to be your asset, sell it, and try to get as much money so they can pay off your loan. Yes, this doesn’t sound good if you are the person pledging the asset, but it’s actually very common in the loan world, and you have no issues as long as you pay the loan back in time. Read more »