What is the difference between secured and unsecured loans?

Secured loans are backed by collateral, such as a house or car, reducing lender risk. Unsecured loans have no collateral, relying solely on the borrower’s creditworthiness. By looking at their ability to repay a loan, assessed by their credit history, income, and financial stability. High creditworthiness means lower risk for lenders and better loan terms.

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What is the difference between secured and unsecured loans?

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