A Secured Loan is less risky and could prove to be cheaper.
When we say "less risky", we mean to the company lending you their money. Banks, loans and secured consolidation loans companies worry about two things - can they make a profit by lending you some money and importantly, will they get their money back! You may be surprised to hear that thousands of loans are not repaid every year, for all kinds of reasons. It is these unpaid loans that make the banks worry about who they are lending money to. If you are credit worthy, in a stable job and haven't moved house too often, then most banks would be comfortable to lend you money on an unsecured basis. However, if that profile doesn't fit you perfectly or you are asking for a larger sum of money, then it is likely that the bank or loan company will be more wary. In these situations they may require some additional security by asking for an asset, usually the equity in your home, to be considered as colateral when they make a loan available. Lending using a "secured loan" makes you a less risky proposition and you become eligible for larger and possibly cheaper loans.