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Secured vs Unsecured Loans

Secured vs Unsecured Loans – What’s the Difference?

Anybody searching for a personal loan is bound to come across secured and unsecured loan options, but many people don’t know what this actually means. If you want to make the right choice for yourself and your situation, you’ll need to know the difference between these two important loan types.

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What Are Secured Loans?

A secured loan is a type of loan where you use an asset you own, such as a car or a property, as collateral for the loan. As a result, secured personal loans typically have lower interest rates than unsecured personal loans, given that the lender has less risk.

However, it’s important to remember that this means if you are unable to repay the loan, the lender has the right to take possession of the asset and sell it to recover their money. At Handy Finance we’ll make sure that you have a repayment plan that suits your budget and lifestyle, so you can enjoy your loan without any stress.

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What About Unsecured Loans?

Unlike secured loans, unsecured loans don’t require you to provide an asset for security purposes. The lender takes a calculated risk, based on factors such as your income and credit score. This can make it difficult to borrow large amounts of money, as the risk to the lender increases with the more you borrow.

It is worth noting that without an asset needing to be provided, the loan process is generally much quicker for unsecured loans, meaning you have the money you need sooner.

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Which Loan Should I Choose?

The loan type that is best for your circumstances will likely depend on what you need it for. Getting a mortgage for property will almost always involve a secured loan, with the asset used as collateral being the property itself. This can also be the case with car purchases, although unsecured loans are a viable option there too.

When you need a loan for something such as a wedding, holiday or medical expenses, you may not have an asset you can offer as security, meaning an unsecured loan is the way to go.

Handy loans can either be secured or unsecured, meaning you can choose the option that best suits your circumstances. Depending on a variety of factors, you can borrow up to $75,000 with Handy Finance and pay it off over one to seven years, with weekly, fortnightly or monthly repayment options.

This information is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, we recommend that you consider whether it is appropriate for your circumstances and you obtain independent advice.

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Handy Finance is all about helping Australians get where they are going in life, which is why our loan approval process is quick and simple. With low rates and flexible repayments, you can have what you need now, rather than later, without any of the stress often associated with finance.

To get started with a Handy loan, find out your personal rate today, without affecting your credit score. From there, the process is easy – you’ll be pre-approved in minutes on well on your way to having the funds you need.

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