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

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.

Business

Scenario:

We need the funds to invest in new equipment. What options do we have if the bank declines our loan proposal?

Response:

We can consider getting a secured loan, which would require collateral but can augment the chances of approval.