Secured Loans

What are secured loans?

Secured loans are those when the repayment of which is guaranteed at the time of borrowing by depositing a collateral with the lender. Generally speaking, the collateral is an asset (movable or immovable property), which becomes a secured debt owed to the creditor. The entire purpose of the collateral is to act as a surety with the lender. When the borrower repays the entire loan amount (along with interest), the lender is obligated to release the collateral in favour of the borrower. And if the borrower defaults in payment, a whole gamut of rights against the collateral gets transferred to the lender, and in the worst scenario, he can also sell the collateral to recover his dues vis-à-vis the borrower.