Let us understand the difference between Secured Loans and Unsecured loans
| Unsecured Loans |
Secured Loans |
| Unsecured Loans do not require providing an assets (Home, vehicle, etc.) to the lender in case of being unable to pay back the loan. This is called collateral. |
Secured Loans require us to provide collateral in the form of a home, vehicle, land, etc. in the case of not being able to repay the loan. |
|
Loan amounts are small (Less than ₹2,00,000)
|
Loan amounts are considerable (More than ₹2,00,000)
|
| You can’t get unsecured loans at banks. We can only avail of an unsecured loan through an NBFC, MFI, local moneylender, etc. |
Secured loans are most often offered by banks and other formal financial institutions like credit unions. |
