How Secured Loans Work
If the borrower does not repay as agreed, the lender may have rights tied to the pledged collateral according to the loan contract and law.
Ready to compare Personal Loans options?
Get free quotes — no obligation, no cost.
Get Free Quotes
Why Borrowers Compare Carefully
- ✓ Potentially easier approval in some cases.
- ✓ Different APR or loan amounts than unsecured offers.
- ✓ Risk of losing the collateral if the loan defaults.
Understanding the Risk
The main risk to the borrower is that the collateral may be at risk if the borrower defaults. Before pledging an asset, borrowers should be confident in their ability to make payments.