Category of loan (Unsecured & Secured)

Whenever you go through a bank or a private institution to take a loan for any trouble or necessary work, you first need to have some vital information for the loan.

You must have often heard that there are two types of loans. Every person needs to know about both secured loans and unsecured loans. When you apply for a loan, it is essential to know which loan is right for you and under which category that loan falls. Come today, and we will tell you complete information about the secured and unsecured loan…

Loan Category

Different types of loans are given in our country but have you ever thought that in which category these two are divided and for the purpose for which they are separated, a person can make good use of them. The loan is divided into two parts. Whenever you take a loan from the bank, then in which category your loan comes first for you to take the loan there. It is essential to know about it, let us know about the sort of loan….

secured-loan Secure Loan

The secured loan is under which the person has to pledge something like property cold fixed deposit PF etc. with the bank as a guarantee.

Unsecured -loan Unsecured loan

This loan does not require any guarantee. It is meant to fulfill all the needs of the individual. The bank gives this loan for a short time.

1. Secured Loan

We have already told you all this common, whenever you go to the bank to take a loan for any critical work, and you pledge something, any of your loans are given by the bank. There are two types of loans by the bank. The mortgage of the thing is called a secured loan. Under whatever cases there are such cases and in the name of the security of the person taking the item, anything can be kept in the bank. A secure loan is also given against the property.


To take a loan against property, the bank mortgages any of your land or your house to itself as security.

You can make it your home. For example, if you want to build your house and need money for it, you can apply for a home loan in the bank. For this, you will have to mortgage any of your property or the property papers of the place where you are building a house with the bank. After that, you will get the loan amount from the bank. In these circumstances, whenever you give the loan amount by pledging anything with the bank, it is not able to repay the loan amount. The most important thing to remember is that if you do not pay the loan amount, the item gets done in the bank’s name.

Loans covered under secured loan

As you all know, the loan is divided into two categories by the bank, and all the people are divided separately under those categories, which loans come under the Secure Loan. Let’s know…

  • Business Loan
  • Gold Loan
  • Car Loan
  • Loan Against Property
  • Home Loan

Benefits of Secured Loan

When a person applies for a loan through the bank for any trouble or trouble or any work for his business, there can be many benefits of taking it, let us know…

  • The most significant advantage of taking a secure loan is that you can easily take a loan by mortgaging anything with the bank.
  • There is a slight risk to taking the loan, but the benefit is a lot.
  • When you have mortgaged the loan amount to something, you will always have to repay the loan given by the bank on time for the safety of your thing, and if you do not do this, then the bank will sell your something and sell your something. Will recover the money.
  • The rate of interest under Secure Loan is also meagre because you take a loan by pledging your valuables.
  • The most significant advantage is that the person’s problem is solved immediately, it takes some time, but the problem is solved.

Disadvantages of Secured Loan

When a person is given a loan for any work through a secured loan, the fear of the most significant loss remains the same. If you do not deposit your loan amount on time, the bank confiscates the property, gold, or any other item you keep. That is, the bank auctions all those things and sells them and covers your money. Whenever you need to take a loan to overcome your problem, you will also have to avoid such losses due to it, and it will be right for you to repay the loan amount on time.

Reasons to take a secured loan.

As it is the dream of every person, to do something in life or there may be any need, for which loan is taken from the bank in the form of loan, every person has some different reasons in it. Let’s know about the reason for taking Secure.

  • One can also take a loan to fulfil one’s dreams.
  • A loan can also be taken to build your own house.
  • The loan can be taken to buy a car or start a new business.

2. Unsecured loan

Whenever a person has to take a loan and does not have some goods to mortgage, then in such a situation, another type of loan facility is also provided by the bank. It is called an unsecured loan, only a guarantee without any security. The loan given by it is called an unsecured loan. For taking this loan, the person does not have to pay any security fee or do not have to mortgage anything as any security. Where is the interest-only to take this loan? You have to pay more because the bank is at risk for the loan amount given by you, the person is unable to repay the loan on time, so the easy way for him is interest, through which perhaps he can refund his loan amount Takes cover.


There is always a risk for the bank in unsecured loans because of how to take the loan from the person. That is why the rate of interest is always higher under unsecured loans. Generally, people take unsecured loans for their business or for starting a new business. The reason for increasing the risk by the bank is that the bank does not have any such items of the person, by selling which the bank can cover its money. Apart from this, any working capital management people also think it right to take this loan. Apart from this, the essential information is that only after seeing the person taking an unsecured loan is the loan given to him by the bank only after adequately checking the civil score.

Loans covered under unsecured loan

There are many types of loans under the unsecured loan. Let us know about all of them…

  • Personal Loan
  • Education Loan
  • Marriage Loan
  • Salary Flexi Loan

Eligibility for availing an unsecured loan

Whenever a person applies for a loan without pledging anything with the bank, it is necessary to have decision qualifications. Only after that, the person is given a loan by the bank.

  • Correct check of the CIBIL score of the borrower
  • Information about the person’s employment
  • Character
  • Bank account details of money transactions

Bank approval for taking an unsecured loan

Why does the bank approve of a person taking an unsecured loan?

Character: Whoever applies for the loan to the bank, first of all, the bank looks at his character history and the person’s employment.

Capacity: The bank also checks the ability of the person taking a loan in the bank. The income of the person is seen through his bank account statement.

Capital: The amount of money saved in the savings account and current account of the person taking the loan is also checked.

Collateral: The person taking the loan has some personal property. He can give it in the form of cholesterol.

Condition: Information about what are the terms of the loan.

Under the unsecured loan, only after knowing about these 5 things, the bank passes the approval for the loan. By whom the person is examined whether he will be able to repay the loan or not, the loan is given only after that.

Benefits of unsecured loan

Unsecured loans can have the following advantages…

  • Under an unsecured loan, the person does not need to keep anything with the bank for security.
  • The rate of interest under an unsecured loan is high, but the person gets the loan immediately in times of trouble.
  • This loan is beneficial to save the person in times of trouble.

When a person needs to take a loan in times of trouble, he also has to bear any losses. Let’s know…

  • The most significant disadvantage to the person is that the loan’s interest rate is very high, and the person takes the loan in times of trouble, but whether he can repay it or not.
  • The person cannot repay the loan taken by him even by mortgaging any item.
  • Under an unsecured loan, more loan is not given to the person at once.
  • The rate of interest on the loan taken under an unsecured loan is very high.
  • The repayment time of the unsecured loan is also significantly less.

Reasons to take an unsecured loan.

There can be many reasons for a person to take an unsecured loan. Due to which the person has to take such a step and has to apply for taking an unsecured loan. Due to which he becomes very compelled and takes an unsecured loan. One can also take an unsecured loan for his expenses, for good education of the children, and also to meet the small needs of the house. Apart from this, there can be many other reasons.

Difference between a secured loan and an unsecured loan

There is a difference in the following types of loans given by the bank to the person in the time of need.

1. Under the Secure Loan, a person can take a loan by mortgaging any valuable thing, land, jewelry etc.,

But under the unsecured loan, nothing is pledged. The loan amount is given based on the civil score of the person.

2. The rate of interest charged under the secured loan is meagre. If the same person applies for the unsecured loan, then the rate of interest is very high. The reason is that in the secured loan, the person pledges his things to the bank. And this does not happen at all in unsecured loans, due to which the interest is charged more.

3. Secured loan is given to the person for many years, whereas the time of repayment of an unsecured loan is significantly less.

4 Under the secured loan, a person can start any of his extensive business because the secured loan can be very much available by the bank. The same unsecured loan is not known so much. The person can fulfil only some of his personal needs in it.


Today, through this article, we have given you all the information about secured and unsecured loans. If the person needs the loan, whichever loan he finds right, it will be suitable for him to take a loan. What are the advantages of taking these loans, the disadvantages, and the reasons for taking a loan? All the things have been explained.

Hope you have liked all the information given by us, you must want to share all this information, and for more information, you can also comment by going to our comment box and connecting to our website.


What is a Secure Loan?

A secured type of loan, in which some valuables have to be pledged in the bank.

What are the loans covered under the unsecured loan?

Personal Loan, Education Loan, Credit Card Loan.

What are the loans covered under Secure Loan?

Gold Loan Business Loan Home Loan etc.

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