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.

By using the asset as "security" (collateral) for the loan.  The lender reduces the risk associated in providing the finance to the customer; if the customer is unable to repay the loan, the lender can take possession of the asset and sell it.

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.