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Getting a secured loan: the basics.

Do you need a loan and own your home or a vehicle? If so, you might be interested in learning about secured loans, where you can use collateral to qualify for a larger loan or a better interest rate. can help you get a secured loan from a lender at a market-competitive price. But before you apply for one, it never hurts to take some time to understand what a secured loan is and whether it’s right for you.

Your questions about secured loans, answered.

What is a secured loan?

A secured loan is backed by collateral. This means that in exchange for being given money by a lender, you have to offer up an asset in return, often property or a vehicle (although in some circumstances, other items can be put up).

What this does is tell the lender that you have something of value that they can seize in the event you don’t pay back your loan. This is a last resort for the lender, however, so don’t be worried that they will take over your valuable possessions on a whim. As long as you pay your loan on time, you’ll have nothing to worry about.

Since you’re putting up collateral to back-up the loan, you’re potentially entitled to a bigger loan and a better interest rate. This is because the collateral lowers the lender’s risk of being left with nothing if you default on your loan.

Secured loans offer better interest rates than unsecured loans, but it takes longer to qualify for one. The lender will take the time to verify your collateral. They will do their due diligence to ensure, for instance, that your car is in good working order, or that you have been taking care of your home. They will want to make sure they have a firm idea of the true value of the asset you’re putting up as collateral.

Once that’s done, the lender will sit down with you and go over the size of your loan and the interest rate. As mentioned, you have the chance to take out a bigger loan and get a better interest rate with secured loans, which isn’t the case if you were looking at another type of loan, such as an unsecured line of credit.

However, the flip side is that an unsecured loan is often faster to qualify for since the lender doesn’t have to take the time to verify the value of your collateral.

Are there different types of secured loans?

There are a number of different types of secured loans you can get, such as title loans and secured personal loans.

Below we take a look at each.

Secured personal loan: This is a general loan given to you based on a pre-agreed upon amount that you must pay back in fixed installments until the loan is repaid. Because it is backed by collateral, the loan amount can be larger than an unsecured loan and you can benefit from a better interest rate. Often secured personal loans must be backed by something valuable, such as property or a line of credit.

Title loans: A title loan, also known as a car title loan, is a loan that is secured by your vehicle. When you agree to this loan, a lien is placed on your vehicle. If you fail to pay back your loan, the lender can legally repossess your car and sell it in an auction to recoup any lost money. Like other secured loans, the benefit is that you can get a better interest rate and a larger loan.

Pawn loans: Pawn loans are backed by smaller assets, such as a computer, jewelry or tools. They are often shorter duration loans; for instance, a lender may give you 30 days to pay back the loan and any agreed-upon interest. The benefit of these loans is they offer those without more expensive assets, such as a house or car, the ability to take out a slightly larger loan and get a better interest rate. However, many people fail to recoup their valuables, helping pawn shops stay in business. 

What can you use a secured loan for?

Because secured loans can provide you with a larger amount of money than unsecured loans, they’re often a great tool to use if you’re planning a more expensive project, such as an extensive home renovation.

Secured loans are also a good idea for debt consolidation, especially because they can offer much more competitive interest rates than other forms of debt — especially credit cards. Similarly, you may want to use a secured loan to pay down a portion of your debt if you can’t get enough to consolidate the full amount.

Is a secured loan the right choice?


  • You can take out a larger loan since it’s backed by collateral.
  • Much more competitive interest rates.
  • Your chance of approval is strong. 


  • They take longer to get approved, as the value of your collateral has to be verified.
  • Not available to those who don’t have something valuable to offer the lender.
  • If you fail to pay, the asset you put up as collateral will be seized.

How do you get a secured loan?

You can begin the application for a secured loan at We’ll guide you to the most competitive interest rate on the market based on your unique circumstances. Our website is quick and easy to use and costs you nothing.

So whether you’re looking to do a sweet home reno or you’re finally tackling your debt and you’re thinking about a secured loan, start your application with us. We’ll connect you to lenders offering great rates.