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 a mortgage, the property itself serves as collateral, while in an auto loan, the vehicle is the secured asset. Borrowers should carefully consider their ability to repay these loans to avoid losing their collateral.