There are different types of loan available in the market. Let us check out which are these ones.
What is a secured loan (loan)? A secured loan is a loan in which the borrower pledges some asset ( tangible goods) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The secured debt also know as Mortgage loan (BoliglÃ¥n) is thus secured against the collateral. In case the borrower defaults, the creditor takes possession of the asset used as collateral and can sell it to recover the amount of debt due from the borrower. Another type of loan is secured loan, in this there’s no automatic link to any tangible property. In case of unsecured loan the creditor cannot take any of your possession to pay off your loan if you default. Allthough it is possible for an unsecured loan lender to get what’s called a ‘court charging order’ on your home (which could lead to repossession) if you can’t repay, this is much more difficult and less likely for it to do.So these are the two main types of loans.
