What is the difference between secured and unsecured used car loans?

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The following table gives a detailed overview of the differences between secured and unsecured used car loans:

Feature	Secured Used Car Loan	Unsecured Used Car Loan
Collateral Requirement	Car acts as collateral to secure the loan	No collateral required
Interest Rates	Lower interest rates due to reduced risk to lender	Higher interest rates owing to higher lender risk
Loan Amount Limitations	Comparatively higher loan amounts approved	Typically lower loan amounts
Approval Process	Simpler, eligibility criteria are more flexible	Stricter eligibility based on income & credit score
Risk to Borrower	Lender can repossess the car if repayments are missed	No asset repossession, but default impacts credit
Repayment Flexibility	Usually more flexible repayment terms	Relatively restricted repayment options
Ideal for	Borrowers comfortable pledging collateral for better terms	Borrowers without collateral but good credit

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