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A secured loan is a form of loan in which the borrower pledges some asset (e.g. a property) as collateral for the loan, which then becomes a secured debt owed to the lender who gives the loan. The debt is thus secured against the asset, in the event that the borrower defaults, the lender takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally lent to the borrower, for example, foreclosure of a home. From the lender's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. If the sale of the collateral does not raise enough money to pay off the debt, the creditor can often obtain a deficiency judgment against the borrower for the remaining amount.

The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property and instead the creditor may only satisfy the debt against the borrower rather than the borrower's collateral and the borrower.

Generally speaking, secured debt may attract lower interest rates than unsecured debt due to the added security for the lender, however, credit history, ability to repay, and expected returns for the lender are also factors affecting rates.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other loan secured on it.

Secured Loans are not regulated by the Financial Conduct Authority

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