Secured loans are those loans that are protected or backed by an asset or collateral of some kind. The item purchased using such loans, such as a home or a car, can be used as collateral, and a lien can be placed on such purchases. This is kept with the finance company/ bank will hold the deed or title until the loan has been repaid in full, including interest and all applicable fees. Instead of the items purchased other items such as bonds, stocks, or personal property can also used to secure a loan.
Secured loans are usually used to obtain large amounts of money quickly. Say it is a home loan or car loan, obtaining a loan with a security (secured loan) is easier than obtaining an unsecured loan. This is because the lender is more confident in giving a larger amount of loan with a security which ensures the repayment of the amount he has given out as loan than an unsecured loan of even smaller amount. Say a person who has his home is laid down as security for his home loan; he will do anything to repay the loan because otherwise he will end up loosing your house.