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Loans · 6 min read ·
Secured or unsecured loan: which suits you?
A loan against property costs less than a personal loan, but puts an asset on the line. Here is how to choose.
What the difference is
A secured loan, such as a home loan, mortgage loan or loan against property, is backed by an asset the lender can claim if the loan is not repaid.
An unsecured loan, such as a personal, professional or unsecured business loan, is approved on your income and credit history alone.
When a secured loan is better
For large amounts and long tenures, a secured loan is usually much cheaper, and lenders will lend more against a property than on income alone.
When an unsecured loan is better
For smaller, short-term needs, an unsecured loan is faster, needs fewer documents and does not tie up your property.