A secured personal loan is backed by collateral. Examples include auto loans and home equity lines of credit.
Secured loans usually have lower interest rates and are easier to qualify for than unsecured loans.
Financial institutions place a lien on your collateral, so they can seize the asset being used as collateral if payment is not made.
With a secured personal loan, you deposit cash into an account to be used as collateral. The borrower will borrow against the collateral and pay the principal and interest to the lender.
Secured Credit Card Similar to a secured personal loan, you deposit cash into an account used as collateral. The borrower will get a line of credit equal to the amount deposited.
Home Equity Line of Credit (HELOC) is a revolving loan that is secured by the equity in your home. You can use the funds like a credit card as per the requirement.
Like a HELOC, a home equity loan is collateralized by the equity in your home. However, with a home equity loan, you receive a lump sum amount of cash.
Pawn shop loans are short-term loans that are secured by a commodity price that people get at pawn shops. Pawn shop loans are regulated by the government.