Compare the basic structures
| Question | Secured loan | Unsecured loan |
|---|---|---|
| Specified asset collateral? | Generally yes | Generally not a specified asset |
| Personal guarantee possible? | Yes | Yes |
| Repayment obligation remains? | Yes | Yes |
| Approval guaranteed? | No | No |
| What sets the rate and terms? | Provider and proposal assessment | Provider and proposal assessment |
Swipe or scroll the table sideways to see every column.
What security changes
List the assets covered by the security and the obligations they support. Check whether selling an asset, refinancing or using it for another facility requires consent. Ask how the security is released when the relevant debt is settled.
For an unsecured proposal, still identify the borrower and any guarantors. Read any general business security separately from a guarantee or security over one named asset. The obligation to repay remains; the documents explain whose assets and commitments are involved.
How to make the comparison useful
Compare offers for the same amount and purpose, then look at the repayment schedule, total cost, fees and obligations. Consider whether you want or need to keep an asset available for another part of your business plan.
If financing a specific machine or vehicle, an asset-finance discussion may be more relevant than comparing only general-purpose secured and unsecured term loans.
Common questions
Is secured lending always cheaper?
Security can influence pricing, but the actual rate and costs depend on the proposal and provider. Compare written terms.
Does unsecured mean no credit assessment?
No. The provider still assesses the application under its requirements.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.