A personal loan is a loan made to an individual rather than a business. They are usually sought in order to consolidate debt or to cover emergency expenses. The two main types of personal loans are “secured” loans and “unsecured” loans.
Secured Loan: A secured loan is one where property is pledged as collateral. For instance, a mortgage is a secured loan with the borrower’s house serving as collateral. Should the borrower be unable to repay and default on the loan then the collateral is claimed by the lending institution as compensation.
Unsecured Loan: An unsecured loan is one where no property is pledged as collateral. The loan is approved entirely on the individual’s ability to repay.
Outside of mortgages and auto loans, the majority of personal loans are unsecured. Because the borrower’s credit score is a major factor in determining their creditworthiness, people with low credit scores are usually unable to get approved for an unsecured personal loan from a bank or traditional lender.
OppLoans leverages cutting-edge technology and customer data to evaluate our customers on a person-by-person basis. We tailor all our products towards a customer’s ability to repay.