Are you looking to apply for a loan to cover your needs and confused between secured loan vs unsecured loan? If yes, many loan applicants face this dilemma. But you don’t have to worry! This post will help you know which one to choose between secured loan vs unsecured loan. Read on! Secured loan vs unsecured loan A secured loan is one for which you need to keep collateral. The best example is a home loan. On the other hand, an unsecured loan does not require you to submit any collateral. The loan is given on the basis of your creditworthiness. Your credit score, income level, repayment capacity make it. A personal loan is the best example of an unsecured loan. How to choose between secured loan vs unsecured loan? By considering a few parameters, you can easily decide between secured loan vs unsecured loan. Take a look:
2. Your repayment aptitude Secured loans may come with the tenure of up to 20 years, and it could be up to 5 years for unsecured loans. If you choose a secured loan, you will be able to manage your outlays better by paying smaller EMIs. On the other hand, an unsecured loan means repaying it faster than a secured loan, and that may hamper your expenses. Thus, you should pick one as per your repayment capacity. 3. Your CIBIL score If you want to apply for an unsecured loan, you need to keep your credit score higher. If it is 750 or more, you can get the loan approval at a lower rate. Applying for a secured loan means that your assets and credit score will be considered vital aspects. No matter which loan you apply; the credit score has to be robust to get the approval. Considering these factors can help you decide between secured loan vs unsecured loan. Bajaj Finserv offers pre-approved offers on personal loans, home loans and more. It is to simplify loan processing. You can check out your pre-approved loan offers today after sharing your basic details such as your name and mobile number. Additional Read: Know The Difference Between Secured Vs Unsecured Loans
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |