A secured loan is a loan in which the borrower pledges an asset (e.g. a car or property) as collateral for the loan. Due to the fact that you are borrowing money against an asset you own, the interest rates tend to be a lot lower than with unsecured loans. That said, the risks can be higher due to the fact that your asset can be repossessed if you do not keep up the repayments. Secured loans are normally used to borrow large sums of money. Some examples include home equity, mortgages and auto loans.