If you’re new to quick cash loans, then you may not know the difference between a personal loan and a business loan. To some, the answer is simple. A personal loan is for personal use, while a business loan is for business use. But the truth is, it is more than that.
A secured loan will require the amount to be guaranteed either by a co-signer acting as a guarantor or a personal asset. If you default on the loan or fail to make payments, the lender will either approach your guarantor and demand the payment or seize your asset.
An unsecured loan, on the other hand, is a borrowed amount approved based on the lender’s assessment on your ability to pay. The assessment is based on your income and your credit rating.
Defining Personal Loan
Personal loan, also known as a consumer loan, is a form of financing for your personal use. A personal loan is either secured or unsecured.A secured loan will require the amount to be guaranteed either by a co-signer acting as a guarantor or a personal asset. If you default on the loan or fail to make payments, the lender will either approach your guarantor and demand the payment or seize your asset.
An unsecured loan, on the other hand, is a borrowed amount approved based on the lender’s assessment on your ability to pay. The assessment is based on your income and your credit rating.