Many people get loans but they have to put up property or something of value to have as “collateral” or secure it. Here are a few loans they secure:
- Home Loans
- Auto Loans
- Personal Loans
- Equity Loans
Almost any loan you get can be secured with “collateral” if it is of value. You can purchase a car, and then the bank can hold the car as collateral until the loan is paid, if the value of the car is worth the amount of the loan. You get to keep the car and use it but if you do not make your payments then they will take your car and sell it to pay off your loan. This is the same way with a home loan. If you do not make your payments, they will ‘foreclose” on your home. That is what secured means. You secure the loan with something that has the same value as your loan amount. That way if it is not paid then they can get their money back.