Secured loans refer to all loans whereby the creditor gets pledges from the debtor such as property which act as a collateral or warranty. Secured loans are largely provided by banks that only offer loans to people that have good credit history that match their requirements. Secured loans allow the creditor to possess the property of the debtor if he or she fails to pay back the money as agreed on the contract.
Secured loans are largely given to companies and individuals who take huge amounts of money to open businesses or for personal use. Although the borrower will be using the property, when they fail to pay back the money the creditor has the power to remove the debtor from the building and take away cars and various other products that equals the amount to be paid. This therefore raises awareness to people who want to borrow huge amounts of money to calculate the pros and cons of taking the loan because they might find themselves homeless and car-less when things do not go according to plan.
There are different types of secured loans and they are not limited to mortgage, pawnbroker, non-recourse, car loans, personal loans, bank loans, home loans and many more. The creditor is the one who decides whether the amount borrowed is suitable for secured loan or unsecured loan. People can easily apply for loans online to various financial institutions.