Secured loan

If a loan is 'secured', it means it is secured against something you own (an 'asset') – and failing to repay the loan could result in the lender taking possession of that asset, and selling it to cover their losses.

The asset in a secured loan will normally be your home, but it can also be your car or another item of a high value.

Advantages of a secured loan
It's usually possible to borrow more than with an unsecured loan. It's also possible to spread payments over a longer period of time. Since the lender knows they have your asset as backup, there is much less uncertainty about whether they are going to get all their money back.

For the same reason, interest rates are often lower.
Even if you have a bad credit history, you may be able to get a secured loan. Your secured asset will reassure lenders that they are able to get all their money back. However, if you currently have other debt problems, taking out further loans of any type could be a bad idea.

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