What is the definition of secured loan and unsecured loan?
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A car loan and mortgage are the most common types of secured loan. An unsecured loan is not protected by any collateral. If you default on the loan, the lender can't automatically take your property. The most common types of unsecured loan are credit cards, student loans, and personal loans.
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Secured loan : Its a loan in which the borrower pledgessome asset as collateral for the loan , which then becomes secured debt owed to the creditor who gives the loan .
Unsecured loan : It refers to any type of debt that is not protected by a guarantor or collateralized by a lien on specific assets of the borrower in case of failure to meet the terms of repayment .
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Shreya ❤
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