A secured loan is a loan that involves holding the loans against collateral. Collateral is term which means the property that is used as security in a loan. Any of your property that is of significant money value has acceptance as collateral. The most commonly used asset for collateral is your home. Some people do not like taking loans against their homes, they find the fact that they may lose their property if they fail to pay off their loan to much of a risk. However many people find it a cost-effective method of raising funds.

A lot of people think of a secured loan as a bargain for the borrower. You get the chance to undertake a major financial venture as with a secured loan you are able to take out quite a significant amount of money. You have the chance to borrow as much as your home equity lets you to. As well as this secured loans offer a high level of flexibility in repayment terms. You have quite a long time to repay the loan, they have low APR, and smaller monthly instalments are all part of the deal you get with secured loans. Furthermore, the lender also gets the freedom to use the amount advanced by the secured loan for anything you like. So as the risk factor is low, you have many flexibilities with a secured loan as the borrower is low risk to the lender as if they fail to pay back the loan they are at risk of having their home repossessed which everyone wants to avoid.