What are Secured loans

Secured loans are those for which a borrower keeps some asset as surety or collateral to borrow money.

 

A secured debt instrument simply means that in the event of default, the lender can use the asset to repay the funds it has advanced the borrower.

 

Common types of secured loans are mortgages and auto loans, in which the item being financed becomes the collateral for the financing.

 

With a car loan, if the borrower defaults on the payment, the loan issuer can seize the vehicle.

 

When an individual or business takes out a mortgage, the property in question is used to back the repayment