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Difference between Secured Loan Singapore and Unsecured Loan

The right loan for you depends on your needs and personal circumstances. There are different options to choose from.

In general, loans can be classified into two categories: Secured Loan Singapore and Unsecured loans. A secured loan has security attached to it while the unsecured loan does not carry any security. Below are the main differences between the two categories of loans:


A Secured loan will require you to attach an asset as collateral. This can either be a car logbook, title deed, household chattels among other valuables.

Unsecured loans do require any asset to be attached to them

Interest Rate

A Secured loan attracts a lower interest rate as they are less risky due to the asset attached to them.

An Unsecured loan attracts a higher interest rate as they are considered riskier since no security is attached to them.

Loan Amount

Secured loans attract huge loan approvals given the security and the extended loan period. The disbursement amount is based on the value of the collateral and the ability to pay.

Unsecured loans attract low amounts of loan approvals given their risky nature. The disbursement amount depends on the borrower’s ability to pay and the credit score.

Loan Tenure

Secured loans are mostly spread for a long time given huge amounts

Unsecured loans are only spread for a short time

Risk Probability to Losing an Asset

For a Secured Loan Singapore, you risk losing your asset upon default. The creditor repossesses the asset when the borrower fails to honor the loan terms as per the loan agreement.

For the unsecured loan, there is nothing to repossess, but the borrower risks a negative listing upon default.

Example of Secured Loans

  • Mortgage – This is a loan that the borrower uses to purchase a house. The property purchased acts as the collateral.
  • Car Loan – This is a loan obtained solely to purchase a motor vehicle. The car logbook is used as the security.

Example of Unsecured Loan

  • Personal loan – This is a general-purpose loan. There are no instructions given on how to utilize your money. It is given with a fixed term of regular monthly installments.
  • Overdraft – This is a type of debt whereby you are allowed to withdraw an amount that is over and above your current account balance. The interest accrues only on the amount overdrawn.
  • Credit Card – This is a card issued by a financial institution to the cardholder, to enable them to borrow funds from the institution.

Where to Apply for the Loans

Financial institutions and Licensed Moneylenders can offer you different types of loans along with their terms and conditions. You can compare the terms and choose the one offering the most favorable ones.

Well, if you are a Singaporean, then we’ve got you covered. SU Credit is a licensed money lender that operates in Singapore.

Why Choose Us?

  • We are Licensed, Moneylenders
  • We Offer Quick Turnaround Time
  • We Offer Personalized Loans
  • We have a Simple Loan Application Process
  • We have a high Loan Approval Rate

Click here for appointment on loan application

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