Secured Loan

A loan backed by collateral — typically your home or vehicle — that the lender can repossess if you fail to repay. Because the lender has security, secured loans usually offer lower interest rates and higher borrowing limits than unsecured loans. However, the risk to the borrower is greater: your asset could be repossessed if you default.

A homeowner takes a £20,000 secured loan against their property at 8.9% APR. If they fail to repay, the lender can pursue possession of the home.

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