Broadly speaking there are two types of loans, that is secured and unsecured loans and, the primary difference between these two types of loans being that the former needs security in the form of collateral against the borrowed amount, while the latter as the name implies does not require any security. Apart from this the repayment terms and the interest rates for these are quite different. You need to analyze carefully with respect to your repayment capability and choose the one that suits you best.
Under this type of loan the borrower is entitled to provide a form of security, for instance say his car or his home. In case the borrower is unable to repay the loan it might result in the loss of his or her car or home that has been provided in the form of security to the lender as this is the only way any lender can seek to recover the amount that they had lent you and the interest on the loan amount. Of these two types of loans the secured ones give you the option of higher borrowing limits and lower interest rates as compared to the unsecured ones and the secured ones are indeed fast loans. They are also far easier and can be obtained with lesser hassles. It is your assets estimated value that determines the amount that you can borrow against and since many people borrow against their homes these loans are sometimes called homeowner loans.
Advantage of unsecured loans
The only advantage of unsecured loan is that it does not require any form of collateral and so do not risk losing your house or car in case you do not keep up with repayments. It is totally up to the lender to make a decision whether to give you a loan and that would be solely based on your income and credit history. Of the different types of unsecured loans we have personal loans
, education loans and renovation loans and so on.