Secured vs
Unsecured Loans in South Carolina

Introduction: Why This Distinction Matters

In South Carolina, deciding on a secured or unsecured loan means you’re making a wise decision about borrowing. The loan type you select will affect your finances for a long time, whether you’re buying something big, covering an emergency or building your credit. We believe that knowing the differences between these loans is the first thing you should do before borrowing.

What Does a Secured Loan Mean?

When you take out a secured loan, you give an asset—like your car, house or savings certificate—as security for the loan. If the loan is not repaid, the lender can legally take the pledged asset.

Secured loans are typically used for:

• Auto loans
  
• Mortgages
  
• Home equity lines of credit (HELOCs)
  
• Savings or CD-secured personal loans
  

Because these loans are less risky for the lender, they tend to come with lower interest rates and higher borrowing limits. BNC Bank offers competitive rates on various secured lending options throughout South Carolina.

You can explore our full range of secured loans on our Loans & Credit page.

What Is an Unsecured Loan?

Unlike secured loans, unsecured loans don’t require collateral. Your credit score, income, and financial history determine your eligibility. If you default on an unsecured loan, the lender can’t take your property, but the consequences—collection actions, damaged credit, and legal trouble—can still be serious.

Unsecured loans are typically used for:

• Medical expenses
  
• Debt consolidation
  
• Travel or special events
  
• Emergency costs
  

BNC Bank offers unsecured personal installment loans with fixed monthly payments and competitive terms.

Key Differences Between Secured and Unsecured Loans

While the presence or absence of collateral is the core difference, each loan type also varies in other significant ways:

Loan Approval

Secured loans are generally easier to qualify for if you have valuable collateral but a lower credit score. Unsecured loans require a stronger credit profile, as the lender’s decision is based solely on your ability to repay.

Loan Amounts and Rates

Because lenders assume less risk with secured loans, borrowers often gain access to larger loan amounts and lower interest rates. Unsecured loans may be capped at lower amounts and carry higher rates.

Risks Involved

The biggest risk with a secured loan is the potential loss of your collateral. With unsecured loans, the damage may come in the form of financial penalties, credit score impact, and debt collections.

Which Loan Type Is Right for You?

When deciding between the two options, consider the following:

Do you have an asset to pledge as collateral?

If so, a secured loan may be a better option, especially if you’re working with a limited credit history or want the lowest interest rate possible.

Is your credit history strong?

Then you may qualify for an unsecured loan with favorable terms, giving you borrowing flexibility without risking any property.

What’s the urgency?

Unsecured loans are typically processed faster. For time-sensitive expenses, they may be more appropriate.

Are you planning a large purchase?

Secured loans are often the go-to choice for big-ticket items like vehicles or home improvements due to their longer repayment terms and better rates.

Examples of Common Use Cases in South Carolina

Secured Loan Scenario

Suppose a Columbia resident wants to purchase a new car. Using the vehicle as collateral, they can access an auto loan with a competitive interest rate and a repayment plan suited to their budget. BNC Bank offers a variety of vehicle financing options to help buyers across South Carolina.

Unsecured Loan Scenario

Now imagine a Charleston family facing unexpected medical bills. They may opt for an unsecured personal loan to pay the expense quickly without risking their home or vehicle. Once approved, funds can be disbursed within days.

Application Process and Credit Impact

Both loan types require an application, a review of your credit history, and a verification of income. However, a secured loan may also involve a collateral valuation process. In contrast, unsecured loan applications tend to move more quickly due to fewer steps.

Secured loans might even help borrowers build or repair their credit if payments are made on time. In some cases, a savings-secured loan can serve as a credit-building strategy for individuals with limited credit history.

How South Carolinians Use Each Type of Loan

Residents across the Palmetto State use secured loans to finance larger, planned purchases. From Myrtle Beach homeowners tapping into their home equity for renovations, to Greenville drivers purchasing a vehicle, the flexibility and affordability of secured options make them a top choice.

On the other hand, unsecured loans offer agility. Whether it’s an urgent dental procedure in Spartanburg or school supplies in Rock Hill, these loans provide fast access to funds when time matters most.

Commonly Asked Questions

Is it possible to apply for both loans at the same time?

However, your credit, income and debt situation will determine if you are approved for each. It’s advisable to talk to a BNC Bank loan officer before applying for several products.

What happens if I can’t repay my secured loan?

If you do not pay a secured loan, the bank may take the collateral through the courts. That’s why you should only borrow what you can afford and reach out to us if you have trouble paying.

Will I damage my credit by applying?

When you apply for a loan, it leads to a hard inquiry that could affect your credit score for a short time. Yet, if you are approved and pay on time, both loans can gradually boost your credit score.

Are the rates charged on loans fixed or can they change?

BNC Bank has both fixed and variable rate choices for different loan types. Many people choose fixed rates because the amount you pay each month stays the same throughout the loan.

Is it possible to change a secured loan into an unsecured loan later?

Not typically. Every loan type has its own structure and rules for approval. If your finances get better, you could apply for a new unsecured loan to pay off the balance on your secured loan.

What Makes BNC Bank Different?

We base our lending on trust, openness and being part of the community. We make sure that every South Carolinian can get fair and affordable credit as a locally focused bank. If you’re using collateral or applying through your income and credit, BNC Bank will help you with education, flexibility and real people to support you.

Final Thoughts: Making a Confident Loan Choice in South Carolina

In choosing between secured and unsecured loans, the right answer depends on your needs, your assets, your credit standing, and your comfort level with risk. At BNC Bank, we’re proud to offer both loan types with a commitment to transparency and responsible lending.

Still unsure? Reach out to your local BNC Bank branch and speak with a lending officer who will help guide you every step of the way.