Secured Loan vs. Unsecured Loan

Posted: Thursday, October 4th, 2018

The difference between a secured loan and an unsecured loan is collateral. A loan is considered unsecured when it is not protected by collateral, that is, without security against nonpayment of the debt. There are some important things for a borrower to know about these two basic types of personal loans, and the experts at Green Light Auto Credit are here to help you make an informed choice.

Secured Loan

Green Light Auto Credit Salesperson Poses with Family and New CarAn auto loan is considered secured because the vehicle itself is collateral. If you cannot make your payments, the car is repossessed so that the lender can recoup the loss. The advantages of a secured loan include:

  • Larger loan amount
  • Longer term = More time to pay off the loan
  • Lower interest rates

Learn More About Secured Loans

Unsecured Loan

An unsecured loan represents more of a risk for the lender because of the lack of collateral. Student loans, signature loans, and credit cards are the most common types of unsecured loans. Since the lender will evaluate the terms and rates based upon your credit score, and minus any assets to back up the debt, an unsecured loan can represent:

  • Higher interest rates
  • Less favorable terms
  • Smaller loan amounts

Learn More About Unsecured Loans

Learn More About Secured and Unsecured Loans

Green Light Auto Credit specializes in providing loans for those with bad credit, including those who have experienced bankruptcy or who are living on a fixed income. We offer very competitive terms and rates, and we’ll guide you through the financing process so you can get the car you need. Fill out an application and find out how easy it can be to get a car loan today. Feel free to contact us if you have any questions.

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