Secured personal Vs unsecured personal loan - Which has the advantage?

Secured personal Vs unsecured personal loan - Which has the advantage?

27 June 2008

Personal loan lenders will often offer a secured and unsecured personal loan, but it is not always apparent as to which will provide you with the best deal. Both have their advantages and disadvantages, with many lenders preferring to offer each for specific purposes only.

A secured personal loan will often be the first choice of borrowers who want a car loan and it for this reason that many lenders will only offer a secured personal loan to buy a car. This allows them to optimise the product for the most popular purpose, but could mean you are forced to use a poor secured loan or else an unsecured personal loan for other purposes. Secured personal loans often have significantly lower rates than unsecured loans, but they are also prone to complexity and greater expense in terms of fees.

An unsecured personal loan will usually be more commonly found than secured loans, but it will usually have a fairly high interest rate. Nevertheless, the simplicity of unsecured personal loans makes them attractive to both lenders and borrowers, with many lenders offering specialised unsecured personal loan deals that can compete well even with secured loans.

Please browse our site if you would like to read more about choosing a personal loan.

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