With a secured or collateral loan, you leverage personal property to obtain the loan. If you default, the property is transferred to the lender.
The interest rate and loan amount can vary depending on the value of the property you leverage. Generally, higher value property can get you a larger loan and possibly a better interest rate, although other factors—such as loan length and credit history—will also be taken into consideration.
Common examples of personal property used to secure a loan include these possessions:
- Savings accounts and CDs