Unsecured vs. Secured Personal Loans in Kenya

Choosing between unsecured and secured loans affects interest rates, approval speed, and risk. Understand these distinctions to pick the right option.

Secured Loans

Require collateral (e.g., title deed, vehicle logbook), offering lower interest rates (10%–14% p.a.) and higher borrowing limits :contentReference[oaicite:19]{index=19}. Ideal for large sums like home renovations.

Unsecured Loans

No collateral needed, can be disbursed in minutes, but charge higher APRs (16%–24% p.a.) due to increased lender risk :contentReference[oaicite:20]{index=20}. Best for smaller, urgent expenses.

Pros & Cons

	Secured	Unsecured
Interest Rate	Lower	Higher
Approval Time	2–5 days	Minutes
Collateral	Required	None
Loan Amount	Up to KSh 5,000,000	Up to KSh 200,000

Which to Choose?

Use secured loans for large, planned expenses to minimize cost, and unsecured loans for fast, small‑value needs. Always compare total cost before deciding.