Secured Loan vs Unsecured Loan in Ireland 2026: How to Choose the Right Option for Your Financial Goals
There are broadly two types of loans: secured and unsecured. The former includes loans backed by collateral, usually your house, while the latter includes loans that are not subject to security. In case you fail to discharge a secured loan, you will lose your asset. They are considered riskier than unsecured loans. However, they charge lower interest rates in relation to secured loans.
It can be quite difficult to come down on one side of the fence or the other because the features of both types of loans vary. Well, choosing the right option should not be difficult for you.
The loan experts at Givemyloan have revealed the difference between secured loans vs unsecured loans in brief:
| Aspects | Secured loans | Unsecured loans |
| Collateral needed | Yes, it will be your property or a car. | No collateral is required. |
| Credit requirement | You should have a fair credit score. Borrowers with an extremely poor credit rating will struggle to be accepted. | Subprime borrowers are acceptable. Sometimes, these loans are available irrespective credit score. |
| Interest rates | Interest rates will be lower than unsecured loans. | They vary by your credit score. The higher credit score keeps lower interest rate. |
| Repayment length | The repayment length is five years or more. | The repayment length is less than five years. |
| Turnaround | It takes a couple of days to complete the process. | Small unsecured loans are approved the same day. |
What are the upsides and downsides of unsecured personal loans?
One of the biggest benefits of personal loans in Ireland is that they are not subject to collateral, so if you fail to discharge your debt on time, you do not have to bear the risk of losing your assets. There are several advantages as well as drawbacks. Look at the following table:
| Pros | Cons |
| Unsecured loans are widely available. Apart from banks, they are also available from credit unions and online lenders. | Interest rates will be high even though your credit score is decent. |
| Subprime borrowers are also accepted. However, high interest rates will be charged for bad credit borrowers. | The total cost of the debt may quickly add up due to fees and associated charges. |
| They come with flexible repayment plans. It could be a lump-sum payment plan or an instalment plan depending on the loan size. | There is a risk of falling into a debt spiral, especially when the payment is to be made in full on the due date. |
| Personal loans are available for multiple usages. You can use them for any purpose, provided it is not related to a business. | There is a risk of overborrowing when the minimum credit score requirement is not needed, usually in the case of small loans. |
| You can consolidate multiple outstanding debts by taking out a personal loan to ease payments. | They can ruin your credit score if you are unable to repay your debt. |
Other key points:
- In order to apply for unsecured loans, you can contact a loan broker. They will help introduce you to a lender whose acceptance criteria match your profile.
- Small personal loans aimed at emergencies are available only from direct lenders and credit unions, but not banks.
- If you need a large amount of money, say, €5,000, banks will not approbate your application if your credit report is abysmal.
- Large unsecured loans may be difficult to qualify for with a subprime credit rating, but unsecured loans for bad credit in Ireland are also approved if they are small, up to €1,000.
What are the positive and negative aspects of secured loans?
It is hard to qualify for secured loans, but the good thing is that you can obtain prequalifying letters from multiple lenders to ensure the lowest possible rates. The following table reveals the positives and negatives of secured loans:
| Pros | Cons |
| The approval is easier even though your credit score is less than perfect, as they are backed by collateral. | Not all secured loans, such as mortgages, can be easily approved with a subprime credit rating. Bad credit secured loans charge high interest rates. |
| These loans enable you to borrow a larger sum of money, depending on the value of equity you have built in your property. | The risk of repossession is high in case of default. You are at risk of losing your home or a secured asset. |
| The repayment length is long, and hence the size of the monthly instalments will be small. You can easily manage them. | While the size of monthly instalments is small, the total loan cost will be much higher. The longer the repayment term, the higher the total interest payment will be. |
| They help build your credit score if you try to repay the debt on time. | Early repayment charges are levied. They are also subject to processing fees, upfront fees and other charges. |
How to decide which loan to choose?
It can be quite complicated to choose between secured and unsecured loans, but below are some factors that can help you make the decision with ease.
When should you choose personal loans?
- Your credit score is good, and you have a great income source to qualify.
- You do not want to bear the risk of losing your assets.
- You cannot wait for days to have approval for a loan.
When should you choose secured loans?
- You want to obtain lower interest rates.
- You are struggling to receive approval for personal loans.
- You are confident about your repayment capacity, so you do not lose your asset.
The final word
When it comes to choosing between secured and unsecured loans, try to obtain prequalifying letters from lenders so you know what you can be offered. If you are not satisfied with the offerings, you should consider a secured loan.
If you are unable to decide between the two types of loans, consult a financial consultant at Givemyloan. They will guide you make the right loan decision matching your needs.
Ava is Editor-in-Chief at Givemyloan and is known for her deep and practical approach to modern personal finance. She has written several articles covering topics like personal loans, business loans, etc. Coming from an economics and finance background, she has worked behind the scenes to curate informative content to help borrowers identify the right loan option.
Ava’s role at Givemyloan lets her combine her interest in writing with her curiosity to explore the finance realm. She likes to be updated about what is happening in the lending industry. Most importantly, she tries to instil her knowledge in her writing in the best way possible.
She is passionate about helping borrowers look beyond the general features of a loan, i.e. about the fees and other intricate details. When she is not writing, she likes to read contemporary fiction. She is on a mission to help educate people looking for loans so that they take the right route.
