Security alert

This isn't about a virus creeping into your hard drive, it is about what you need to know about lending.

Specifically, just what the difference between secured and unsecured loans might be. It may not seem like much, but when some bruiser is driving off in your car legally, it can make a huge one to you. Cashdoctors.com.au wants you to understand as much as you can about your financial life without having to learn it while watching your own tail lights pulling away from the kerb.

On the face of it, the differences seem pretty cut and dried. A secured loan is one that is secured, and an unsecured is not. It is a bit more complicated, however, and it is important to know what the banker means by security, on these kinds of loans.

It all begins in the banker's way of looking at things. To them, a loan is either bankable or not. This means that there either is; or is not enough potential profit to justify the risk. If there is profit in it, but too much risk, the banker decides he can balance that risk with a security. This is what the banker is going to come get if you miss the payments, and can be anything of value.

This is why a bank won't give you a payday loan, they think you are too risky for such a short term, low profit loan. Cashdoctors.com.au looks at you and your payday loan differently. Just log into cashdoctors.com.au and sign up for your Cash Doctors card, this will let you get your money faster and without all the paperwork. It also comes in handy when you have a cheque, and it would just take too long to filter it through your account.

You shouldn't get the impression, however that unsecured loans are free money, and don't carry any penalties for default. An default on an unsecured loan will damage your credit just as it will on a secured one, and you can find yourself in court for either. If you don't understand about damaging your credit score, then you need to now, because mishandling your credit can leave you unable to get a loan of any type. Not to mention, every time your score gets lower, the interest you have to pay on any loan gets that much higher, costing you more in the end.

You should have a pretty good understanding of the differences in these loans now, and hopefully a better understanding of the importance of using them wisely.

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