Secured Loan |
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A Secured Loan is a loan in which the borrower must offer some form of collateral (e.g. real estate, personal property, investment securities) to be forfeited should he default on the loan. This provides the lender with a layer of security diminishing the risk involved in offering the loan.
It should be noted that the lender's measure of safety is tied directly to the volatility of the collateral's value.