Meaning
Secured debt involves a loan where the borrower pledges an asset as collateral, assuring repayment to the lender.Definition
This debt is backed by specific assets. If default occurs, the lender can seize and sell the collateral to recover the outstanding loan amount.Key Characteristics
Often features lower interest rates than unsecured loans due to reduced lender risk. The pledged asset protects the lender.Common Examples
Mortgages (home), auto loans (vehicle), and certain personal loans secured by savings or investments.Author
