Personal Loan · Guide
Secured vs unsecured personal loans
Almost every personal loan advertised in India is unsecured. But you can also raise money against fixed deposits, gold, or securities. This guide explains when a secured route saves you real money and when the effort isn't worth it.
By FinancePaisa Editorial Team · Research & editorialUpdated · 2 min read
On this page (6 sections)
The core difference
A secured loan is backed by an asset the bank can claim if you default. An unsecured loan is not. The bank's risk is lower on a secured loan, so it charges a lower interest rate.
Rate difference in India today
| Product | Typical rate (p.a.) | Approval speed |
|---|---|---|
| Unsecured personal loan | 10.5% – 24% | 1–5 days |
| Loan against FD | 1% – 2% above FD rate | Same day |
| Gold loan | 9% – 15% | Same day |
| Loan against securities | 9.5% – 11.5% | 1–2 days |
Unsecured personal loan
- Typical rate (p.a.)
- 10.5% – 24%
- Approval speed
- 1–5 days
Loan against FD
- Typical rate (p.a.)
- 1% – 2% above FD rate
- Approval speed
- Same day
Gold loan
- Typical rate (p.a.)
- 9% – 15%
- Approval speed
- Same day
Loan against securities
- Typical rate (p.a.)
- 9.5% – 11.5%
- Approval speed
- 1–2 days
When secured makes sense
- You already own an asset you don't want to sell (FD, gold, mutual funds)
- You need a rate meaningfully below the personal-loan market
- You want a shorter approval window
- Your credit profile qualifies you only for high unsecured rates
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When unsecured is fine
If your loan is small relative to your income, your credit score is strong, and you can repay in 1-3 years, an unsecured personal loan is usually the cleaner choice. You avoid tying up an asset and can pre-close without asset-release paperwork.
Frequently asked questions
Sources & references
- RBI — Directions on loans against gold — Reserve Bank of India
- SEBI — Loan Against Securities framework — Securities and Exchange Board of India
- RBI — Pre-payment Charges on Loans Directions, 2025 — Reserve Bank of India
Rates, fees, eligibility, and product terms cited on this page reflect the sources above at the time of publication and may have changed since. Always verify directly with the lender or regulator.