Unsecured Loans vs Secured

Many people think that the differences between secured and unsecured loans are easy to pick-up. In fact, a majority of people who are into the business of borrowing money think that they know everything about these.

In all honesty, both unsecured and secured loans have one (1) purpose – and that is to provide funds to the person who needs it. It can be for a personal emergency, or it can be used to fund or finance a business.

But when you hear unsecured loans vs. secured, what’s the first thing that comes to mind? Before we go into that topic further, let us first clarify what both of these are.

What are Unsecured Loans?

Unsecured loans are known to be the types of loan not secured or protected by a collateral or an asset. In comparison to a secured loan, an unsecured loan is usually riskier because no other thing or property is involved.

The only thing a lender will check and evaluate is your financial record, your track and history with other lenders, among others. Some of the most common unsecured loans include:

• Personal Loans (Salary Loans)
• Student Loans
• Credit Cards

What are Secured Loans?

On the other hand, secured loans are the loans that usually have a certain asset or property hanging. For instance, you need to borrow money and you need a collateral; so you use your car as a collateral for the loan.

If you fail to pay the lender back, then the lender will have ownership of your car. When a lender releases the loan, they’ll usually hold onto the deed or the sale of the property you placed as a collateral. Some of the most common types of secured loans include:

• Car Loans
• Business Equity Loan
• Loan Against Property
• Line of Credit Loans

So, in terms of choosing the best type of loan for you, it’s going to depend on what your goal is. Unsecured loans vs. secured; the option you hold will depend on what you’ll use it for. Both of these loans have their advantages and disadvantages so you have to check on that as well.

Here at SoFlo Funding, you wouldn’t run out of options whether you need a secured loan for funding, or an unsecured loan. We offer both to our clients and it’s up to them what option they will choose.

Unsecured Loans vs. Secured: Which One’s Better?

If you have a business that you need to finance, or if you just need funds to settle some obligations, you can definitely run to us for funding. Both our unsecured loans and our secured loans have their own advantages. For our unsecured loans, here are some of the things you might enjoy:

• Lower interest rates for monthly payments compared to other unsecured loans in the market (usually at 4% to 6%)
• Funds are released faster compared to other unsecured loans in the market
• Higher amount than other sources
• Risk-free type of loan – no asset on the line

For our secured lines, however, our clients can enjoy the following perks:

• They can enjoy a 0% interest in payments between 15 to 21 months if they qualify
• Get up to a total of $500K in funding
• Considerate funding managers who you can negotiate with

Eligibility

Some might fund our qualifications to be strict. However, if you don’t qualify, we will tell you exactly what you need to do in order for you to qualify to any of our programs. If you are choosing between Unsecured loans vs. secured loans, then you might want to dig deeper on what you’re open with.

Would you be willing to put an asset or a property on the line for the funds? Is the purpose of the loan you’re applying for more important than some of your properties? Or would you prefer and choose to pay for higher interest rates for unsecured loans?