Posted On: 10-February-2022


What is a secured loan?

If you’re eyeing something that requires a huge capital such as thinking of starting a buy, or buying a car, or getting your home renovated you may run short of budget. In this case  you can apply for a loan at any of the local banks of with ESWARI CAPITAL. We aim to help you cover the cost without making a hole in your pocket.

While considering your loan options you might be confused between a secured and an unsecured loan. Secured loan basically is a kind of loan for which you offer to lend in return something valuable that you own. This acts as a collateral in case you can’t pay back your loan. Unsecured loans are loans provided to you by the lenders after the lender considers your financials.

Everything has their own pros and cons, same with secured and unsecured loans. So before you finally make up your mind about which one to avail it’s better to understand them both.

A secured loan is called secured because it is backed by collateral. You can also call it mortgage loan. The most common secured loans you’ll find in the market are mortgages, car loans. In these cases loans are provided against  your valuable assets such as home or a car. You can but use any of your valuable assets as a collateral, it doesn’t just have to be your home or car. When you aren’t able to pay back the loan the lending company or a bank has the authority or the right to seize your valuable assets as payment .

When you choose to avail secured loan ,the lender puts a lien on your valuable asset that you offer as collateral. Once the loan is paid off, the lender is authorized to remove the lien and you have the authority to own both assets free and clear. These are the kinds of assets you can use as collateral for a secured loan:

  • Real estate
  • Bank accounts
  • Vehicles
  • Stocks, mutual funds or bond investments
  • Insurance policies, including life insurance
  • High-end collectibles and other valuables

In terms of security secured loans are much riskier than unsecured loans because the lender has the right to seize your valuable asset in case you’re not able to pay back the loan you opted for.

What is an unsecured loan?

The advantage of unsecured loan is that it requires no collateral. You're charged interest rates and fees but you do not have to offer any collateral. Some examples of unsecured loans are student loans, personal loans, home loans etc. The icing on the cake is that now home loan interest rates are lesser than before.

Since collateral is not involved in this case banks or financial institutions give out or provide these loans considering your credit score, your credit score is the history of your repaying of past debts. That is why these loans charges higher interest rates than secured loans though not always.

The number of unsecured loans are growing due to its advantages.  You can opt for personal loans for any purpose.  It can be to renovate your house, or buy an asset, to fund a wedding or an education.


Keeping all of these in mind what ESWARI CAPITAL feels is you must opt for an unsecured loan. But then again as and how it suits you all, you are free of choosing any. Providing you the best offers and making it easy for you to apply for these loans makes us satisfied as we are a company that believes is lessening your financial burden and giving you new hope.