A secured loan is a type of personal loan that requires collateral. Collateral could be personal property like your home or your car. Collateral could also be money, typically held in a savings or investment account. If you don’t pay back your loan, the lender can take ownership of your collateral. This is called repossession.
When comparing secured vs. unsecured loans, secured loans are easier to qualify for and usually come with a lower interest rate. This is because putting collateral on the line reduces some of the lenders’ risk. In other words, the lender can recoup something of value, even if you default on your loan.