A secured loan is a finance agreement that is secured against a tangible asset or land, regardless of what the loan will be used to purchase.

The lender ‘secures' the loan because it reduces the risk associated in providing the finance to the customer.

Where all or part of a secured loan is used to purchase a vehicle the customer owns the vehicle from day one – there is no deferment of title.

The secured loan agreement usually takes the form of:

  • A mortgage.
  • A second mortgage.
  • A loan secured against another asset of value.

A secured loan involves the supply of finance by the creditor to the debtor who will make repayments over the duration of the agreement until the full amount is repaid.