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Collateralized Loans

Secured loans are a form of loan where the borrower provides assets as collateral for the loan. These assets are called "collateral" and can be, for example, real estate, vehicles or other valuable items.

Collateralisation provides the lender with a certain degree of security, as in the event of non-payment of the loan, the lender can realise the collateral and thus cover the outstanding amount. Since the risk for the lender is thus lower, secured loans can usually be offered at lower interest rates than unsecured loans.

As a rule, secured loans are used for larger loan amounts such as mortgages or car loans, as valuable, valuable and relatively easy-to-sell assets can usually also be provided as collateral for these.