With a Secured Car Loan, the car being purchased is used as security against the loan. The loan is secured with the lender by the vehicle. If the borrower defaults on the loan, the lender has the right to repossess the car and sell it to claim any unpaid monies. An unsecured loan has no security offered against the loan. In some instances, a lender will not accept the vehicle being purchased as security against a secured loan. This may happen with some older vehicles. An Unsecured Personal Loan is essentially a personal loan where no security is needed hence the meaning unsecured.