What’s the Difference Between a Secured Loan and an Unsecured Loan?
A secured loan is backed by some sort of collateral that you, the borrower, agree to let the lender repossess if you don’t repay the loan. For example, auto loans generally use the car you’re buying as collateral for the loan. Unsecured loans aren’t backed by any collateral and can be more difficult to qualify for, and more expensive as well.