What is the key difference between secured and unsecured loans?

What is the key difference between secured and unsecured loans?

• A. Secured loans are backed by collateral; unsecured loans have no collateral but higher risk and interest.
• B. Unsecured loans are backed by collateral; secured loans have no collateral.
• C. Both types share identical risk and interest regardless of collateral.
• D. Secured loans require government guarantees.

Answer: (A)