What Is a Secured Loan?
A secured loan is a loan backed by collateral — an asset the lender can take if the borrower does not repay as agreed. Mortgages (secured by the home) and auto loans (secured by the vehicle) are common examples. Because the lender's risk is lower, secured loans often carry lower interest rates than unsecured loans.
Secured vs. Unsecured
An unsecured loan has no specific collateral and is approved mainly on credit history and income. If a secured loan goes unpaid, the lender can repossess or foreclose on the collateral.
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🔗 Related Terms
More Loans & Credit Terms
- Amortization
- APR (Annual Percentage Rate)
- Balance Transfer
- Balloon Payment
- Buy Now, Pay Later (BNPL)
- Cash Advance
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.