Types of loan

tell me details the defination of sesured and unsecured loan

OK, well a secured loan is a loan that needs to borrowed against collateral or assets. This basically means that a great credit score alone wont help you get this type of loan. In order to obtain a secured loan, one would have to offer some sort of collateral like a car, a house, stocks, etc.

The banks and financial institutions require this collateral because they want to protect themselves just in case you default on your loan. And just in cased you do default on your loan, the bank will then repossess the collateral that you used to secure the loan and they will sell it to make a profit. They call it secured because they are securing themselves from losing money. Using collateral protects them against financial loss in the case of a default from a consumer.

Now in the case of an unsecured loan, they don't require that you use assets or collateral in order to secure this type of loan. This type of loan is given to you based on your creditworthiness. They will usually use your credit score and your salary history as a basis for lending you money.