Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Personal Use Loan > A Complete Guide to Secured and Unsecured Personal Loans

Personal Use Loan

A Complete Guide to Secured and Unsecured Personal Loans

A Complete Guide to Secured and Unsecured Personal Loans

With the economic effects of the pandemic finally coming true, both individuals and organizations are trying to get back on their feet and mend their finances. For individuals who had faced salary cuts and had delayed payments, a personal loan is often what comes to the rescue. There are two types of personal loans- secured and unsecured. What’s the difference, and which one should you choose? Let’s have a brief look. 

Secured personal loan

When you avail a secured loan, you basically take it from an insurance agency along with an asset that can back up the loan. The asset is mortgaged for the amount you borrow as a secured personal loan. Once you repay your entire loan amount, your asset can be free from mortgage and you needn’t worry about it anymore. However, till the time your loan is not repaid, your asset is virtually held by the bank. If you fail to make the payment, your asset can be taken over by the lender. 

There are various advantages of a secured personal loan. Since assets are kept as security, these loans are easier to procure and carry lower rates of premium. They also charge lower personal loan interest rates. The finer details a different for each lender, but loan amount limits and repayment tenures are also higher when it comes to secured loans. 

Unsecured Personal Loan

Additional Read: How to Check Personal Loan Eligibility in India

Unsecured personal loan:

Unsecured personal loans are not protected by any collateral. Interest rates for these loans are generally higher as opposed to secured personal loans. These are usually taken by individuals who are able to repay smoothly without having to compromise on their assets. Unsecured loans are usually opted for in case of student loans, credit card debt payments, etc. Interest rates are generally higher for unsecured personal loans. The principal amount could be lower than that of a secured loan, and so would be the repayment tenure. 

However, there are numerous positives of an unsecured personal loan. These are not as risky as secured loans, so you don’t carry the stress of probably losing your belongings. An unsecured loan process is much simpler, with no collateral assets to evaluate and process. The documentation is much easier. One of the key advantages is that it is more accessible. You need not own assets to be able to borrow. You, however, do need a good credit history and credit score. This is something you can easily check online within minutes before applying for the loan. 

Picking a personal loan: Secured vs Unsecured: 

There are certain key aspects to consider before choosing any personal loan. The primary factor is, of course, the interest rate. Interest rates vary from lender to lender. The other key aspect is the process of acquiring the loan. Many a time, the need for a personal loan is urgent. At such a time, you wouldn’t want to waste precious time on a long documentation process. You should always do your homework and conduct a quick check by comparing loans on an aggregator site. You can also check the personal loan EMIs and interest rates offered by various lenders on their official websites. 

Based on all of these considerations, we strongly suggest an unsecured personal loan over a secured one, because of the following factors. 

  • You needn’t bother with worrying about both repayment and losing an asset when you take an unsecured loan. 
  • The process of an unsecured loan is much shorter and easier, making emergency borrowing practical. 
  • Unsecured loans will motivate you to maintain a good credit score. If you make your repayments on time, it will ultimately help you with all your borrowings in the future as well. 
  • You can close an unsecured loan much faster as it is a smaller amount with lower interest and shorter repayment tenure. 

Additional Read: Pros and Cons of Unsecured Personal Loan

Conclusion:

The ultimate choice for your personal loan needs will depend on your specific requirements and financial situation. However, no matter how urgent it is, do remember to conduct a thorough check and make an informed decision. Use loan calculators and get an accurate idea of what you’re signing up for. 

If you’ve made up your mind about an unsecured loan, Tata Capital Unsecured Personal Loan would be a good choice with its flexible repayment tenure, quick documentation and easy processing, and attractive interest rates, among other features.

Apply Now

Get an Instant Personal Loan for all your needs !

Apply now
Popular Searches
loan without cibil personal loan for 15000 salary Loan for ring small cash loan on aadhar card pre approved personal loan What To Buy On Dhanteras Personal loan when self employed how to increase cibil score form 15g for pf withdrawal how to download aadhar card
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Important Information

Investor Information

Visit us on:,Visit us on: www.tatacapitalmoneyfy.com,www.tatacapitalmoneyfy.com

Our Private Equity Funds

Amalgamated Companies

Top Branches
Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.