The difference between secured and unsecured loans is that secured loans require collateral, while unsecured loans don’t.
Unsecured loans: The majority of personal loans are unsecured, which means they’re not backed by collateral. Signature loans and payday loans are types of unsecured personal loans. Secured loans: A secured personal loan is backed by collateral that the lender can repossess if you default, like your car or savings. For example, a title loan is a type of secured personal loan.