Can someone explain a secured and unsecured loan in detail,

[AnnetteB · Accepted solution]

The main difference in a secured loan and an unsecured loan is whether or not you give collateral to the lender in exchange for the loan.

When you talk to a lender about a secured loan, they will want something of value in exchange for lending you the money.  For example, most mortgages are secured loans.  If you get a mortgage on a house and you do not make the loan payments, then the lender will take the house instead.  The house was the collateral that secured the loan in that example.

For an unsecured loan, the lender is strictly relying on you to pay the loan back.  There is nothing given for collateral.  Many times, the interest rate for an unsecured loan will be higher because of the additional risk the lender is taking. 

[edited 3/27/2020 | 12:03 pm PST to correct typo]