New Delhi, Sept. 10 -- A personal loan helps individuals meet their financial needs such as travel, education, or medical expenses. These loans are typically available in two categories, secured and unsecured. Each category has a unique process and structure driving it.

Choosing between them depends on a borrower's financial situation, assets, and repayment capacity. Before applying, it is vital to understand how each loan type works. This article explains the key difference between secured and unsecured personal loans.

A secured personal loan is a type of loan that requires an asset as security. This asset can be a house, a vehicle, or a fixed deposit. The borrower offers this asset to the lender until the loan is repaid. If the borrow...