What are 5 examples of a secured loan? This question is about Personal Loans

Five examples of secured loans are mortgages, auto loans, secured personal loans, credit-builder loans and home equity loans. A secured loan is a loan that is backed by collateral, which could be any asset roughly equal in value to the amount being borrowed, such as a car, home or money in a savings account. If the borrower fails to make payments on the loan, the collateral can be seized by the lender as compensation. You can find more details below. 5 Examples of a Secured Loan Mortgages. Mortgages are used to finance the purchase of a home, and they are secured by the home being purchased. The lender can put a lien on the property and foreclose on the home if the borrower fails to make payments. Auto loans. Auto loans are used to finance the purchase of a vehicle, and the vehicle is used as collateral on the loan. If you don’t make payments, you risk losing your vehicle. Secured personal loans. Although most personal loans are unsecured, secured personal loans are available, especially for people with low credit scores. Secured personal loans can be used for just about anything, from debt consolidation to home improvements. Credit-builder loans. Credit-builder loans are designed to help people build or establish credit. The lender will put money into a savings account for you as collateral. You’ll then need to make payments equal to the amount in the savings account, plus interest. Once you’ve finished repaying the loan, the lender will give you the funds. Home equity loans. Home equity loans allow people to borrow money against their home’s equity, which is the value of the home minus what is owed on the mortgage. Your home serves as collateral for a home equity loan. If you’re not comfortable with putting something up as collateral, you may want to consider getting an unsecured personal loan. To see the best offers available, check out WalletHub’s picks for the best unsecured personal loans. You can also estimate your potential rates using our free pre-qualification tool.

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What are 5 examples of a secured loan?

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Gino Rodriguez, Writer

@gino_rodriguez • 09/30/22 This answer was first published on 09/30/22. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Five examples of secured loans are mortgages, auto loans, secured personal loans, credit-builder loans and home equity loans. A secured loan is a loan that is backed by collateral, which could be any asset roughly equal in value to the amount being borrowed, such as a car, home or money in a savings account. If the borrower fails to make payments on the loan, the collateral can be seized by the lender as compensation. You can find more details below.

5 Examples of a Secured Loan

Mortgages. Mortgages are used to finance the purchase of a home, and they are secured by the home being purchased. The lender can put a lien on the property and foreclose on the home if the borrower fails to make payments.
Auto loans. Auto loans are used to finance the purchase of a vehicle, and the vehicle is used as collateral on the loan. If you don’t make payments, you risk losing your vehicle.
Secured personal loans. Although most personal loans are unsecured, secured personal loans are available, especially for people with low credit scores. Secured personal loans can be used for just about anything, from debt consolidation to home improvements.
Credit-builder loans. Credit-builder loans are designed to help people build or establish credit. The lender will put money into a savings account for you as collateral. You’ll then need to make payments equal to the amount in the savings account, plus interest. Once you’ve finished repaying the loan, the lender will give you the funds.
Home equity loans. Home equity loans allow people to borrow money against their home’s equity, which is the value of the home minus what is owed on the mortgage. Your home serves as collateral for a home equity loan.

If you’re not comfortable with putting something up as collateral, you may want to consider getting an unsecured personal loan. To see the best offers available, check out WalletHub’s picks for the best unsecured personal loans. You can also estimate your potential rates using our free pre-qualification tool.

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