A secured loan is a type of borrowing where the borrower offers an asset, known as collateral, to the lender. This collateral can be anything of value, such as a car or house. If the borrower fails to repay the loan, the lender has the right to take the collateral to recover their losses. Because secured loans involve collateral, they often come with lower interest rates compared to unsecured loans. This makes them an attractive option for individuals looking to borrow larger amounts of money. However, it also means that borrowers must be cautious, as failing to repay can result in losing their valuable assets.