Secured Financing

Secured financing is a type of loan where the borrower provides an asset, like a house or car, as collateral to the lender. This collateral serves as security for the loan, giving the lender confidence that they can recover their money if the borrower defaults. Because of this added security, secured loans often have lower interest rates and larger borrowing limits compared to unsecured loans. If the borrower fails to repay, the lender has legal rights to seize and sell the collateral to recover the owed amount.