Collateral vs non-collateral loan
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I need an education loan for abroad studies
I don't know how to start
Please help -
- What is a secured (or a collateral) loan?
When someone wants to borrow a large sum of money, banks and NBFC’s 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. - What is an unsecured (or a non-collateral) loan?
Sometimes, it’s enough for a bank to know that you are going to a university abroad for your studies. They do not need any collateral and trust you to repay the loan amount (with the interest) once you graduate and start earning.
Read this blog to know more about these loans and where to apply for them
- What is a secured (or a collateral) loan?
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They both have their pros and cons-
- Collateral loans have a lower interest rate
- Non-collateral loans give you more time after graduation to start earning
- Non-collateral loans ask you to pay a simple interest every month during the moratarium period, and more
