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Secured Loan

A secured loan is a type of loan that requires the borrower to provide an asset as collateral to the lender. This collateral serves as security for the loan, reducing the lender's risk. If the borrower fails to repay the loan, the lender has the right to seize and sell the collateral to recover the outstanding debt.
Common examples of secured loans include mortgages and auto loans, where the purchased property (a house or car) serves as collateral. Secured loans often come with lower interest rates compared to unsecured loans, as the presence of collateral reduces the lender's risk.
However, it's important to note that if you default on a secured loan, the lender can take possession of the asset used as collateral, which could result in the loss of your home, car, or other valuable property.

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