 TITLE: How to Get a Low Interest Personal Loan CONTENT: Types of Personal Loans\n-----------------------\nThere are two main types of personal loans: secured and unsecured.\n**Secured Loans**  \nSimilar to a secured credit card, a secured loan requires the borrower to provide the lender with some form of collateral. This collateral acts as a security deposit for the loan and protects the lender in case you fail to pay back your debt.\nThe most common types of secured loans are mortgages, home equity lines of credit (HELOCs) and auto loans. With a mortgage, the home is the collateral; with an auto loan, the car. Remember that loans like this typically restrict what you can use the borrowed money for: Mortgage loans can only be used to buy a home, and auto loans can only be used to purchase a car.\n**Unsecured Loans**  \nMost personal loans are unsecured, which means they don't require any collateral from the borrower. With these loans, you can apply for the loan, be approved on the merits of your financial profile, and not have to worry about providing the lender with any collateral.\nApproval for unsecured loans is based on your credit history and your past ability to pay back debt on time. Lenders typically use your credit reports and scores to figure out how likely it is you will make your new payments punctually. With most unsecured personal loans, you have no restrictions on how you can use the money. Lenders typically disburse personal loans in a lump sum, and then you're free to spend the money at your discretion. Understanding unsecured personal loans before you apply is important to getting the best interest rate and also determining whether this is the right solution for your cash needs. END