A secured loan is a type of borrowing where the borrower offers an asset, such as a house or car, as collateral to the lender. This means that if the borrower fails to repay the loan, the lender has the right to take the asset to recover their money. Because of this added security, secured loans often come with lower interest rates compared to unsecured loans. Common examples of secured loans include mortgages and auto loans. In these cases, the property or vehicle serves as collateral. Borrowers should carefully consider their ability to repay the loan, as defaulting can lead to losing the asset used for security.