What are the different types of personal loans?

There are 2 types of personal loans – secured loan and unsecured loan. Next, an alternative loan is a cash-secured loan or “reverse loan”.

An unsecured loan is a loan that does not require any collateral or assets to secure the application. Payments comprise a principal amount plus interest. The interest rate for such a loan is typically higher than a secured loan. However, there is no risk of repossession of your assets if you fail to make payments.

secured loan requires collateral and assurance of payment before approval. With this type of loan, it is possible to obtain a significant amount of funds. Bear in mind that there is the risk of losing your assets if your installments are not paid.

An alternative to the above mentioned loans is a cash-secured loan or “reverse loan”. This type of loan requires you to deposit an amount of money into an account. You then can borrow from the account in the future.

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