 TITLE: Are Unsecured Loans a Good Idea? CONTENT: Unsecured vs. Secured Personal Loans\n------------------------------------\nThere are two broad types of personal loans: secured and unsecured. To get a secured loan, you must pledge collateral—something of value that the lender can take if you don't pay the loan. Mortgage loans and auto loans are common types of secured loans. With these loans, the home or car you're financing acts as the collateral; if you default on the loan, the lender will foreclose on your house or repossess your car. For a secured personal loan, the lender might ask you to pledge collateral such as real estate, investment or bank accounts, insurance policies, or valuables such as art or antiques.\nBecause the lender has collateral to fall back on if you default on the loan, secured loans pose less risk for lenders. This can make it much easier to get a loan with less-than-stellar credit. Secured loans may give you access to higher loan amounts, along with lower interest rates and better terms than unsecured loans.\nThe big downside of a secured loan, of course, is the risk of losing your collateral if you can't pay the loan.\nUnsecured personal loans also have their own pros and cons. Because the lender is shouldering a bigger risk, you'll probably pay more interest than you would for a secured loan, and you may not be able to borrow as much money. You'll also need better credit to get an unsecured loan than a secured loan.\nThe big upside of an unsecured loan? You can get the money you need without jeopardizing your home or other assets. END