Back to Basics – Secured Loans

This week we’re still talking about debt but moving on from credit cards to a different type of debt: secured loans. Buying larger items, like a car or home, usually requires bigger loans that get paid back over many years. That means the lender has more risk of losing their money by not being paid back. That’s why auto loans and mortgages are secured debt. The asset you purchase becomes collateral that backs up the loan. The lender can seize the asset if you get too far behind on the payments. Think about it – how long would you lend someone money without some type of guarantee you’ll get your money, or something else valuable, in return?

Keep reading here to learn about secured loans and when you might need one.