What You Need to Know About an Unsecured Loan

Posted: Monday, April 9th, 2018

If you’re considering an unsecured loan, keep the following facts in mind:

  • An unsecured loan is secured without the borrower putting up any collateral.
  • Common types of unsecured loans include credit cards or personal loans.
  • While unsecured auto loans do exist, they’re rarely a good choice for borrowers.
  • Approval for an unsecured auto loan requires a very high credit score.

Unsecured vs. Secured Auto Loan

Typically, financing a car means getting a secured loan. The car itself is collateral, and the buyer makes monthly payments, gradually paying off the loan amount. The buyer takes ownership of the vehicle once the loan has been paid off. However, in an unsecured car loan, the buyer purchases the car outright with the loan amount, then pays off the lender over time. Find out which one is better for your needs:
Green Light Auto Woman posing with new Toyota Corolla

  • Why Choose an Unsecured Loan?
    • If you have excellent credit, it can make for a simpler buying process.
    • It lets you to go to a dealer with a check for the full value of the vehicle.
  • Why Choose a Secured Loan?
    • It takes excellent credit to get an unsecured loan. If you’re shopping for bad credit loans, it’s unlikely you’ll get approved.
    • A secured car loan interest rate is almost always lower than an unsecured loan.

Unsecured vs Secured Loans Answers to Car Payment Questions

Learn More at Green Light Auto Credit

If you’re looking to finance a used vehicle, get in touch with Green Light Auto Credit. We offer competitive interest rates, and our knowledgeable finance team can walk you through the loan process from start to finish. Apply today to get quick pre-approval!