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Shivani (Querist)

01 June 2010 what is the meaning of Secured Loan and Unsecured Loan standing in Balance Sheet.Gve example
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Shivani

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

01 June 2010 The two most well-known types of loan are an unsecured loan and a secured loan. These are two very different ways of obtaining credit, the big difference between the two is the rate of interest you will be charged. Unsecured loans typically have a higher rate of interest than secured loans. The definition of a secured loan is that you borrow money against collateral, i.e. something of value, usually, your home. With an unsecured loan the lender has no security if you fail to make the payments; this is why the interest rate will be higher.

Example:--

C/C Limit (Secured Loan)

Loan from ABC Pvt Ltd. (Unsecured Loan)

Kishen K Warrier

Kishen K Warrier (Expert)

02 June 2010 Agree

For companies

In case of Secured loans a charge should be created in favour of the lender over the asset given as security.No charge creation for unsecred loans

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