Secured Loans

A secured loan is the most common form of loan available.

The amount of money borrowed is backed by personal property with a secured loan and means that the borrower forfeits the goods if they fail to repay the loan.

Most lending companies will offer secured loans as they pose a far lower risk to them if the borrower defaults on their obligation to repay the loan amount.

Common items that are held as security for a secured loan are automobiles, in the case of auto loans, or the borrower's house in the case of a mortgage or similar home owner loan.

If you plan to file for bankruptcy then any property claimed under the conditions of a secured loan will be turned over to the lender before your unsecured loans are dealt with.

You cannot sell property that is part of a secured loan without paying the lender back from the proceeds.

The interest rates for secured loans tend to be less than those of other loans because the lender is guaranteed some form of payment by selling the goods that your loan was secured against.