If we look at the loan meaning, it is a specific amount that depends upon the borrower’s need and is granted for only one-time use. So, in a loan, the credit advance cannot be used over and over again like a credit card. Loans can be of two types, secured or unsecured. A fast loan is one which is backed by some type of collateral; for example, a car loan is secured by the vehicle, and if the borrower is not able to fulfill the financial demands, then the lender can repossess the car, sell it and have the remaining loan balance. On the other hand, an unsecured loan is not backed up with any kind of collateral, and the approval of these loans relies only on borrowers’ credit history. Secured loans have lower interest rates, while unsecured loans have higher interest rates.

Difference 101