Secured loans are offered to homeowners only while unsecured loans are offered to both homeowners and tenants.

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Secured Vs. Unsecured Loans

urlop-macierzynski.net A secured loan is any loan that requires a borrower to provide the lender with some form of security. Homeowners are the usual target of the loan as they have the most acceptable security which is their homes. A borrower who agrees to a secured loan on his home must remember that although he retains physical possession of his property, it can be repossessed by the lender if the loan and the interest are not paid accordingly.
An unsecured loan, on the other hand, is a loan wherein the lender has no rights over any property of the borrower. It is based on a promise to pay.
The comparison between these two can serve as a basis of choosing which loan is right for a borrower. Secured loans are offered to homeowners only while unsecured loans are offered to both homeowners and tenants. The maximum loan value for secured loans is 100,000 while 25,000 is the maximum loan value for unsecured loans. Secured loans offer a maximum repayment period of 25 years while it is only 7 years for unsecured. Interest rates are much lower in secured loans while unsecured loans understandably, have higher rates. Both are affected by credit status.
Bad credit history or having no credit history at all, frequent change of address and being self-employed can make it difficult to get an unsecured loan. Homeowners with bad credit record have better chances of approval in applying for a secured rather than an unsecured loan.

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