If you ever consider or have gotten a loan, they can be broadly classified into two types: secured and unsecured loans.  These loans have some important differences that we will discuss below.

An unsecured loan is probably the most common loan.  Did you get a car loan?  How about one for your computer?  If you have, these are unsecured loans.  The way you get approved for this type of loan is by having a good credit rating.  Financing wise the term is short with five years being the average.

A secured homeowner loan is a little different.  If you have ever renovated a portion of your house or added on to it, you probably had one of these loans.  The difference here is that you take advantage of the equity you have in your home and effectively get a second mortgage on it.  This way, the monthly payments are smaller and you can finance the loan up to twenty five or thirty years.

Just be sure to talk to a financial professional for advice that applies to your situation:  I am just mentioning this here for educational purposes and to increase your knowledge.