Shruti Rai last edited by
What is a secured (or a collateral) loan?
ChristineJoseph last edited by
When someone wants to borrow a large sum of money, banks and NBFCs ask them for some collateral in the form of property, fixed deposits, or other investments and savings. This collateral is considered as a form of security for the bank and they have the right to withhold it in case you are unable to pay the loan back.
Sure, this means that the bank needs you to present proof that you have some collateral to place. But the bright side about these kinds of loans is that the interest rate on them is low. Yes, it’s even lower than the interest on a personal loan!
Read about all these points in detail here: Education loan for abroad studies | Collateral vs Non-collateral
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