answersLogoWhite

0


Best Answer
Copy

The similarities are that both types of debts can be collected according to the respective laws governing the transactions. Secured debts are those in which some form of collateral has been used. When someone buys a house, the house is used as collateral for the loan. Lenders have much more leeway when collecting on defaulted mortgages, such as foreclosure/forced sale. In the instance of credit card debt, which is unsecured lawsuits have to be filed, won, judgments executed, and so forth. Secured debts always have to be paid or the property has to be forfeited. Unsecured debts, even when a judgment is issued are not always collectible.

Answer :

Unsecured debt refers to any type of debt or general obligation that is not collateral by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment.

Secured loan is a loan where you will be required to use your property as security against the loan, so the lender is able to balance the risk of lending to you.

User Avatar

Wiki User

โˆ™ 2011-07-27 04:56:27
This answer is:
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
๐Ÿ˜‚
0
User Avatar

Add your answer:

Earn +5 pts
Q: What are the similarities and differences between a secured loan and an unsecured loan?
Write your answer...
Submit

Related Questions

What core differences are there between a secured and unsecured loan?

Secured and unsecured are the two main types of loans. Secured loans require the borrower to give some form of security to the lender, like a home or car. Unsecured loans do not require any kind of collateral.


What is the difference between a secured and unsecured passwords?

Secured passwords may be encrypted, unsecured ones may not.


What is the difference between unsecured and secured subordinated notes?

The first one is unsecured, the second one secured.


What is the difference between unsecured loans and secured loans?

basically in which no security is used are unsecured loans and where secuity are used are secured loans


What is the difference between secured and unsecured priority or nonpriority claims in bankruptcy?

Secured debts take priority over unsecured debts in a bankruptcy proceeding.


What is the difference between a secured and unsecured bond when posting a bond to get out of jail?

a secured means you either have the money or the property a unsecured means u can use a bail bondsman to get out


What are the differences between a secured and unsecured credit card?

I have never heard of credit card that is unsecured. So you better off check with the proper legal bank's credit card then apply for one, don't put yourself into the scam.


What is an unsecured loan used for?

The difference between an unsecured loan and a secured loan is very big if for some reason bankruptcy is declared or the loan cannot pay repaid. Secured means that the buyer still needs to repay and unsecured mean he doesn't if bankruptcy is declared.


Is there a list of secured and unsecured credit cards?

a good secured card is first premier or orchard bank. unsecured is capital one, etc.


What is the difference between secured debt and unsecured debt?

A secured debt - is protected by being tied to something valuable (jewellery, car, house etc). If you default on the repayments, you could lose the item the debt is secured on ! An unsecured debt is not tied to any physical property. If you default on an unsecured debt, they will usually take you to court and have the debt recovered from your wages.


What is the difference between secured and unsecured bonds?

Secured bonds are those bonds on behalf of which company has pledged some kind of assets security in bank for refund of bonds while unsecured bonds are reverse of secured bonds which means these bonds don't have the security of any assets for refund.


Is bank overdraft a secured or unsecured borrowing?

yes


What is the difference between secured and non secured loans?

Secured loans are backed by an asset, to be collateral in case the borrower defaults on the loan. An unsecured loan does not have this and usually costs more and has a higher risk to the bank.


Add a suffix to the word secured?

"unsecured" : without security


If a car is reaffirmed and the secured to lender amount is 7500 and 3086 is unsecured is the secured paid under bankruptcy or owed by the buyer?

Reaffirmation of a secured loan means the borrower is responsible for repaying the entire debt. Not certain what "3086 is unsecured" means.


What is the difference between secured and unsecured loan at the bank?

A secured loan is where there is a physical item that can be claimed if the loan is not paid - a house, a car, jewelry, etc. An unsecured loan is where there is nothing for a bank to take to get its money back if you default, such as education loans, credit cards and similar loans.


Do you pay more interest on unsecured loans than on secured ones?

Interest rates are typically higher on unsecured loans rather than on secured loans. This is because there is no collateral backing the loan.


Are secured loans better to get than unsecured ones?

With a secured loan, you are able to borrow more money than with an unsecured loan. It would depend on how much you needed to be loaned. Most institutions offer both, however, I would go with a secured loan.


Will you pay more interest on an unsecured personal loan than a secured one?

The amount of interest you pay depends on the institution that you borrow from. You will usually pay more on an unsecured personal loan than a secured one.


What is unsecured personal indebtedness?

Unsecured personal indebtedness is debt that is not secured against an asset. For example, a mortgage is a debt secured against an asset, being a house. If you fail to pay your mortgage, your house will be taken of you. An unsecured debt is that of a loan or credit card bill which is not backed up by an asset.


What is valuation and verification of secured and unsecured loans in auditing?

by getting the loan statement.


What is the difference between secured and unsecured loan?

A secured loan would be a car loan for example. The car is used as collateral for the loan. A signature loan would be an unsecured loan. The only thing the lender would do is look at your credit worthiness and make you a loan based on you simply saying you'll pay them back.


Is a Line of Credit a secured loan?

Some are secured, some are not. A Home Equity Line of Credit is secured by real estate (a residence or property) A business line of credit may be secured by a stake in the business or lien against equipment or inventory. Business lines may also be unsecured. Personal or "signature" credit lines are unsecured.


Can you explain what the difference is between unsecured and secured business credit cards?

Unsecured credit cards allow free spending with a credit limit. They are the most common type of credit card and are based upon trust. Secured credit cards are backed by funds that are pre-paid into the account or collateral. They are more like a loan.


Is Medical bills secured or unsecured debt?

Medical bills are unsecured debt. Regards, Adam Luehrs KL Financial Services http://www.klfinancialservices.com