Whether you should apply for a secured or a non-secured loan – really comes down to you and your financial situation. In most cases a secured loan will be cheaper for you – but may take longer to arrange and involve more paper-work. A non-secured loan will suit someone who needs money fast, particularly if they have a good credit history – but its going to cost a bit more in most circumstances.
A loan can be may secured against an asset that the lender could sell if the borrower stopped making repayments. The most common example of this type of loan is of course a mortgage on a house called a mortgage. It is equally possible to guarantee a personal loan with a car, valuable jewelery, antiques or even stock certificates (if they are worth anything these days, that is!).
A secure loan is better if you have the security to offer, want a longer term loan and are confident in your ability to service the debt – you don’t want to lose your security after all.
In contrast a non-secured loan is made to you as an individual and the lender is trusting in your ability to make repayments – and your willingness to do so. A classic case would be a young graduate in their first job – they might be making a reasonable salary but not have any assets yet but need a loan to finance a car or clothing for their new job. In this circumstance although the non-secured loan will cost a little more – it will not only allow the borrower to buy what they need, they will also be on their way to building up their credit record so that when the time comes for a big a loan they will most likely be in a position to be approved.
Both types of loans have their place – its up to the borrower to decide which is best in their situation.
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