When you take out a secured loan, you provide some form of collateral (such as your home or car) to act as security for the lender, protecting them from loss if you fail to repay the loan. An unsecured loan does not use any collateral.
What are the types of secured loans, and the collateral required?
• Mortgage Loansare secured loans that pledge property as collateral.
• Nonrecourse loans.
• Car loans.
• Home loans.