What is a secured loan?

A secured loan gives security to the lender , not to you the borrower.
 
Any loan which requires the borrower to provide the lender with security other than just a promise or guarantee to pay.  The security might be any number of things including;

1. The deposit of goods
2. The retention of ownership of goods ( as in a HP agreement)
3. Or the providing of a mortgage over property.

The security will always be a mortgage over property and in almost all circumstances it will be the borrower`s main home.

If you decide to take a secured loan or mortgage on your home, you should always remember that, although the property remains in your possession, it can be repossessed by the lender if the interest or loan are not paid according to the agreed terms.

The lender will then sell the property in order to recover the money you borrowed plus additional costs incurred in recovering the money- this is the same with all lending companies. It does not matter what type of lender is involved- bank, building society or finance company. If you borrow money using a mortgage as security you are agreeing that the lender can claim the mortgaged property if you fail to keep to the repayments.