Security
The RADIUS protocol does not transmit passwords in cleartext between the NAS and RADIUS server (not even with PAP protocol). Rather, a shared secret is used along with the MD5 hashing algorithm to obfuscate passwords. Because this particular implementation is not considered to be a very strong protection of the user's credentials, additional protection, such as IPsec tunnels or physically secured data-center networks, should be used to further protect the RADIUS traffic between the NAS device and the RADIUS server. Additionally, the user's security credentials are the only part protected by RADIUS itself, yet other user-specific attributes such as tunnel-group IDs or vlan memberships passed over RADIUS may be considered sensitive (helpful to an attacker) or private (sufficient to identify the individual client) information as well. The RadSec protocol claims to solve aforementioned security issues.
Read more about this topic: Radius Server
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