Unsecured Car Loans – Guide to Comparing & Applying for an Unsecured Car Loan
When applying for a car loan, there are a lot of types to choose from including unsecured car loans
One option you may hear frequently mentioned is the option between secured versus unsecured car loans. But what’s the big difference?
As it turns out- there is a rather big difference. In this article, we will take a look at the difference between an unsecured versus secured car loan and explain each. Stay tuned as we take a closer look at the differences between a secured and unsecured car loan.
The Big Difference between Unsecured Car Loans and Other Loan Types
There is one glaring difference between a secured and unsecured or personal car loan as it’s sometimes called. The difference comes down to the very thing that gives them each their name: security.
A secured car loan secures or backs the loan with the actual property as its collateral. In this case, the car that the loan is being taken out to purchase is used as the actual security for the loan itself. This means that should the loan default then the car itself may be repossessed to pay for the remainder of the loan.
Advantages
There are some distinct advantages to having a secured loan over an unsecured loan. This typically is due to the fact that since the loan is secured, the lender can offer better terms or rates to the applicant. Because the risk has been lessened by securing the loan, the applicant can enjoy many of these benefits by opting for a secured loan.
Chief among these benefits is having traditionally lower interest rates for the duration of the loan period. In comparison to other unsecured car loans or personal loans as they are often referred, the interest rates of a secured loan are noticeably less. This is due to the fact that the risk is lower for the lender considering the car itself may be repossessed to recuperate losses.
Potential Disadvantage
Because the loan is secured with the car itself, typically the loan terms will require that full comprehensive coverage be maintained on the vehicle at all times. Though you may not be required to carry this kind of insurance by law, your loan terms will require it to preserve the value of the automobile.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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