WHAT IS A LOAN
It can be hard to choose the right loan. This guide goes over the two basic types of loans: secured and unsecured. When you take out a secured loan, you have to put up something of value as collateral, like a mortgage, a pledge, or a hypothecation. This lowers the interest rate. Unsecured loans, such as personal, commercial, or school loans, don’t need collateral, but they usually have higher interest rates because they are riskier for the lender. Find out what makes a loan secured or unsecured, and look at some frequent examples of each type so you can make an informed decision about borrowing.