Secured and Unsecured Loans

When it comes to loans, banks typically offer two main types: secured loans and unsecured loans. The key difference between the two lies in the need for pledging collateral with the bank. Here’s a breakdown of each:

Secured Loans

Secured loans need the borrower to pledge collateral with the bank or the lending institution. Collateral is any asset the borrower offers as security, which the bank can take ownership of if the loan is not repaid. Common types of collateral include property for home loans and cars for auto loans. Mutual funds, fixed deposits, shares etc. can also be used as collateral for getting a loan.

Features of Secured Loans

  • Lower interest rates
  • Higher borrowing amounts
  • Longer repayment terms
  • Longer processing times due to the evaluation of assets

Examples of secured loans include home loans, auto loans, and loans against property.


Unsecured Loans

Unsecured loans do not need any collateral. This absence of collateral makes these loans riskier for banks, leading to higher interest rates. To qualify for an unsecured loan, banks consider factors like your credit score, employment history, references, available funds, and repayment capacity.

Features of Unsecured Loans

  • No collateral required
  • Higher interest rates
  • Short to medium-term loans
  • No restrictions on how the funds are used
  • Faster processing times


Examples of unsecured loans are personal loans, unsecured business loans, and credit cards.

Loan Application Process

With 2S Services, getting a loan is as easy as 1-2-3-4!

Step 1 —> Fill out the “Contact Us” form

Step 2 —> Speak to our expert

Step 3 —> File loan application

Step 4 —> Receive the amount in your bank account