Secured Loans

 

A secured loan is a loan where the lender is provided with something of value to hold as security until the loan is repaid.  It the terms of the loan repayment are not met, then the lender may be able to use the security to recover what is owing.  Typically, if terms of the repayment and interest on the loan are not met, then the lender has the right to sell the security to recover the debt.

Because the lender takes less risk with a secured loan, available secured loans may be larger, longer term or at lower interest rates than unsecured loans.  Remember - secured loans are less risk for the lender, only because the borrowed keeps the risk.  If you do not meet the terms of the loan, you risk forfeiting the security.

A mortgage is security for a loan in the form of the provision of a right in property, such as land or buildings, or (more commonly) a sum of money borrower for which property is the security.

A pawnbroker provides smaller secured loans for item of value that are held as security.

Depositing something with a pawnbroker to get some short term cash and redeeming it later when you have the money, may be a way out of a short term hole as a "one off".  If it becomes a regular thing then it is a very expensive way of borrowing money.  There may be better ways.

Able was I ere I saw Elba

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