A secured personal loan requires an asset to be provided as collateral in case you’re unable to meet your future loan repayments. With a car or other asset used as security for the loan, the interest rates tend to be lower as there is less risk to the lender. Unsecured personal loans do not require you to provide an asset as collateral and the loan amount will be based on your ability to repay. They often suit borrowers with a strong credit history but who don’t own any assets. If you default on an unsecured loan, the lender lacks an asset they can sell to cover the amount owing. That’s why their interest rates are typically higher. Find out more by reading our blog on understanding secured vs unsecured personal loans.