Secured Loan

A secured loan can be described as a loan which the debtor pledges an individual asset, or a number of assets (eg. property or car), as collateral for the actual loan, which in turn will become a secured debt to be paid to the particular creditor that gave the loan. The particular debt is therefore secured against the collateral — in the case that the debtor defaults on the payment, the creditor can take control of the asset used as collateral and could sell it off in order to get back some of, or perhaps all of, the money initially lent to the borrower – for instance, by selling off a home. In the perspective of a creditor this is a class of debt in which a lender has been given a portion of the bundle of rights to a specific property. The opposite of a secured debt or loan is a unsecured debt, and that is not attached to any kind of particular asset and rather the lender can only satisfy the debt against the debtor instead of both the debtor's collateral and the debtor.