secured-loan

Vocabulary Word

Definition

A 'secured loan' is a type of loan backed by collateral - an object or property that you guarantee to the lender. If you don't repay the loan, the lender can take the collateral.

Examples in Different Contexts

In banking, a 'secured loan' is a loan backed by collateral, which the bank can seize if the borrower fails to repay. A loan officer might say, 'Secured loans typically offer lower interest rates because they pose less risk to the lender.'

Practice Scenarios

Real-Estate

Scenario:

I'm looking at this property as an investment, but I don't have enough cash on hand. Any suggestions on how to finance the investment?

Response:

One approach might be to take out a secured loan using my primary residence as collateral to cover the cost of the investment property.

Tech

Scenario:

Your credit score is low, making it tough to secure a personal loan. Maybe you should consider some alternative lending options.

Response:

In that case, I can opt for a secured loan by pledging my car as collateral to the lender.