What is a secured debt or loan?
A debt or loan is “secured” if it is backed by a thing of value, also called “collateral.” If you don’t pay the debt, your creditor will take the collateral as payment. Common examples of secured debts are mortgages and car loans. Some stores make secured loans for household appliances like refrigerators and washing machines. A secured credit card is backed by a savings account or other collateral; the credit limit is based on the value of the collateral.
