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Overview
of secured loans and unsecured loans
Glossary
Annual Percentage Rate
(APR) - The APR is the true rate of interest charged
on a loan taking into account the total cost of interest and
other charges (e.g. broker's fees / legal fees).
Collateral -
Assets pledged as security for a loan. In the event that a
borrower defaults on the terms of a loan, the collateral may
be sold, with the proceeds used to satisfy any remaining
obligations.
Secured Loan -
A loan with assets (usually, home equity) pledged as
collateral. The value of the collateral mitigates the
lenders risk.
Unsecured Loan -
A loan without any collateral which depends on the credit
history and financial position of the borrower.
Overview
of secured loans and unsecured loans
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