Secured Loans

A secured loan is usually needed when borrowing larger amounts to fund major purchases. A secured loan is contingent upon the borrower providing "collateral" to ensure repayment. For example, a popular secured loan is a home equity loan.

To obtain a home equity loan, you must give the lender rights in your home as collateral; a mortgage is written against it. Likewise, with a car loan, you are using the car as the collateral for the loan. In the case of default, the lender can take possession of the vehicle.

Secured loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans.

As the term implies, a secured loan means you are providing "security" that your loan will be repaid according to the agreed terms and conditions. It's important to remember, if you are unable to repay a secured loan, the lender has recourse to the collateral you have pledged and may be able to sell it to pay off the loan.

Examples of Secured Loans:

• Home Equity Loan
• Home Equity Line of Credit
• Car Loan (New and Used)
• Boat Loan
• Recreational Vehicle Loan
• Home Improvement Loan