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Secured vs. Unsecured
There are two main types of loans, secured and
unsecured loans. When applying for any type of credit, it is
important to understand exactly what kind of loan you are
applying for and what makes it different from the
counter-loan-type. Below is a general comparison of secured and
unsecured loans. If you have any questions, please
contact us.
Secured Loans
A secured loan is when you guarantee your credit with some form
of collateral. It is typical that you secure the loan with the item
being financing. For example, you secure a car loan with the car
being financed, or a mortgage with the home. If you don't meet the
loan's payment obligations, then the item being secured will be
taken away from you by your creditor, i.e. foreclosed (house) or
repossessed (car). The creditor will sell the item received so that
they can be reimbursed for the loan that you defaulted on.
The one main advantage of secured
loans are the interest rates. Since you are backing your loan
with collateral, the interest rates are typically lower than
unsecured loans.
Please
contact us if you are interested in applying for a secured
loan.
Unsecured Loans
Unsecured credit is a line of credit that is not secured by
anything other than your 'good word' that payments will be made.
Your creditor will have no form of guarantee that they will be
paid. If you don't pay, there is nothing they can do. They can
not come and take your home or car. As a result, the interest
rates associated with unsecured loans are typically higher than
secured loans.
Besides not losing any personal
property if you go into default on your loan, the other main
advantage of unsecured loans are that they are
dischargeable in bankruptcy.
Apply
now for an unsecured loan.
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