how do secured vs unsecured loans affect your credit?

March 2, 2010

in Secured loans

My wife and I are looking to buy a house in the next year and to prepare for that, we want to downgrade our car. With what we want to put down on the new car and wanting to finance only 3k-5k of the car, our bank doesn’t do auto loans for that little, but they will give us a personal loan.

How does a personal(unsecured) loan affect your credit vs a secured (auto loan)?

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{ 2 comments… read them below or add one }

Bob March 2, 2010 at 8:31 am

Unsecured loans have higher interest rates than secured loans. The higher payment from the unsecured loan will increase the debt to income ratio and possibly result in a higher interest rate.

Hippie Chick March 2, 2010 at 9:27 am

Should make no difference in regards to score.

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