 TITLE: What Is an Unsecured Personal Loan? CONTENT: How Unsecured Loans Differ From Secured Loans\n---------------------------------------------\nYou may be able to apply for a secured personal loan rather than an unsecured personal loan. The big difference is that you must provide the lender collateral when you take out a secured loan. Your collateral is what \"secures\" the loan, and if you stop making payments, the lender can take the collateral to cover your debt.\nWith an auto loan or mortgage, two types of secured loans, the car or home is collateral for the loan. Title loans and pawn shop loans are two additional types of secured personal loans; these loans typically come with high interest and onerous terms, so borrowers usually turn to them as a last resort.\nYou can sometimes secure a loan with cash rather than property. For example, a credit-builder loan is a secured installment loan that uses money set aside in a savings account or CD as collateral while you pay off the loan. It could be a good option if you're looking to build credit for the first time. END