If you have collateral of any kind then you will have to decide between a secured loan or an unsecured one, but if you don't have any collateral then you'll have no alternative but to take out an unsecured loan.



It's clearly much easier to get a secured loan, because the lender is going to claim the right to whatever you put up as security if you don't pay back the loan on time, but that's also one of its main disadvantages and it's an important thing to take into account.

If there's a real likelihood that you'll default on the loan then don't put up your house or car or anything else as collateral! On the other hand, if you have a job that looks secure and you merely want to make home improvements or to take a vacation then choose a secured loan every time, because it will be much cheaper. Before you start checking out all the different on-line and land based secured loans that are obtainable, it's important to make sure that the value of your intended collateral is considerably higher than the amount that you want to borrow, especially because the value of real estate is falling fast right now.

The bottom line is, that whilst unsecured loans are generally more difficult to get, they are not impossible to obtain, even if you've had a bankruptcy or recently lost your job, and the only real downside is that the interest will be considerably higher. If you have a high credit rating and a job that looks somewhat secure, then an unsecured loan shouldn't be hard to get and the interest wouldn't be that much higher than for a secured loan. If you're unemployed or filed for bankruptcy in the last seven years, then be aware that you'll have to pay a lot more interest and that you shouldn't take out a loan at all unless you absolutely must.

In conclusion, even if you're stressed and a need a loan really quickly, don't take the first one that's offered to you, and at least try to compare two or three of them. Furthermore, even if you're not in need of a lot at this time, it would still be a good idea to discover different ways to reduce debt and to improve your credit rating, both of which would be very advantageous if you later decide to apply for a loan.