Secured and Unsecured Credit
Over the years I have been asked by many consumers what is unscured debt and secured debt. ( whats the differance in the two)? So I have decide to explain this in my blog.
Secured credit is backed by pledging an asset(collateral) as a guarantee you will repay the money owed. For that reason secured credit typically has a lower interest rate than unsecured credit. Examples of secured credit ,mortgages, equity loans, auto loans, mobile home loans, pass book loans and secured credit cards.(secured credit cards are attached to a personal bank account of equal value).
Unsecured credit means that there is no collateral backing the loan- just good faith; for that reason this type of credit typically carries higher interest rates. Examples of unsecured credit are unsecured credit cards (not tied to a bank account), store charge cards,student loans, and personal loans. You can find out more at http://www.nwcdr.com/what_is_debt_consolidation.htm
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