Personal loans can be secured and unsecured. Understanding the difference between secured and unsecured loans is important in order to improve your knowledge of finances. Essentially, lenders will allow you to borrow money with only your promise to pay them back, or lenders will require that you use an asset as security for your loan. Learn more about the differences between the two loans below, courtesy of short-term installment loan lender Blue Trust Loans.
Secured Loans
Secured loans are loans that are backed by an asset. For example, in the case of a mortgage loan, the house is the asset that’s used as collateral for the loan. With an auto loan, the car is the collateral for the loan. When you agree to a secured loan, you agree that the lender can claim the collateral if you miss payments on the loan. Secured loans can allow you to borrow larger amounts of money at a lower rate since the lender is more confident that they will not lose the money if you default.
Secured personal loans can benefit borrowers with average to poor credit who don’t qualify for an unsecured loan. Before taking out a secured loan, you should always consider the consequences of losing the asset you’re using as collateral.
Unsecured Loans
An unsecured loan is not attached to any collateral like a secured loan is. Lenders will typically provide money loans that are unsecured based on your creditworthiness, proving your ability to pay back the loan. Lenders are taking more of a risk when providing unsecured loans, as there is no asset to recover in the case of a default. Common types of unsecured loans are credit cards, student loans, and personal loans.
With no collateral to trade, unsecured loan rates and terms vary based on your credit score, income and other factors. At Blue Trust Loans, we have minimal loan requirements compared to the eligibility criteria required by most banks or other traditional lenders. Unsecured loans may be ideal for borrowers with good to excellent credit – or even without good credit – and are available through online lenders like Blue Trust Loans.
How to Get an Unsecured Loan
You may be able to get an unsecured loan with a reputable lending company like Blue Trust Loans. Obtaining a money loan can help cover you in a financial emergency should you find yourself with unexpected expenses. At Blue Trust Loans, you can apply for cash online in just a few easy steps. We have minimal loan requirements compared to the eligibility criteria required by most banks or other traditional lenders. For more information on how you can obtain emergency funding, call us at 877-770-2682. We’re here for you 24-7.
The content on this site is for informational purposes only and is not professional financial advice. Blue Trust Loans does not assume responsibility for information given. All information should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if this information is safe and suitable for their own situation.
Hummingbird Funds, LLC is a sovereign enterprise, an economic development arm and instrumentality of, and wholly-owned and controlled by, the Lac Courte Oreilles Band of Lake Superior Chippewa Indians (the “Tribe”), a federally-recognized sovereign American Indian Tribe. This means that the Hummingbird Funds’ installment loan products are provided by a sovereign government and the proceeds of our business fund governmental services for Tribe citizens. This also means that Hummingbird Funds is not subject to suit or service of process. Rather, Hummingbird Funds is regulated by the Tribe. If you do business with Hummingbird Funds, your potential forums for dispute resolution will be limited to those available under Tribal law and your loan agreement. As more specifically set forth in Hummingbird Funds’ contracts, these forums include informal, but affordable and efficient Tribal dispute resolution, or individual arbitration before a neutral arbitrator. Otherwise, Hummingbird Funds is not subject to suit or service of process. Nothing in this website is intended to waive or otherwise prejudice Hummingbird Funds’ entitlement to these protections. Neither Hummingbird Funds nor the Tribe has waived its sovereign immunity in connection with any claims relative to use of this mobile site. If you are not comfortable doing business with a sovereign instrumentality that cannot be sued in court, you should discontinue use of this website.