Question
What is the difference between a Secured Loan Agreement and an Unsecured Loan Agreement?
Answer
In a Secured Loan Agreement, the Borrower consents to the Lender taking some form of "Security" i.e. a registered interest or condition over real or personal property (that is capable of sale, disposal or dealing) for the purpose of "securing" the repayment of the Loan. Essentially, it is an offering that serves as "collateral" in case the Borrower is unable to repay.
On the other hand, an Unsecured Loan Agreement does not involve the offering of a Security Interest to the Lender by the Borrower.
Therefore, the main difference is that the Secured Loan Agreement include additional provisions relating to the Borrower's Security, such as insurance over the Security and terms.