The participants of the financial world started a loan type in which the borrower
was required to keep a asset belonging to him as a security against the loan amount and it was termed as a secure loan.
This kind of loan format is known to be creating a win win situation for both the parties involved in the transaction like the lender gets relive from the risk associated with the transaction in presence of an asset that can be liquidated to recover the loan amount in case of a default and on the other hand the borrower gets a low interest loan and this effect is created just because the borrower is ready to loose his asset if he/she does not services the loan properly.
There are two types of secured loans prevailing in the market i.e first is the mortgage loan and the second one is the non recourse loan as in the first one the loan amount is backed by an asset and a foreclosure is the possible step that the lender is likely to take in case of a default and the non recourse loan format is the one in which only a partial amount is paid and the asset say a car is purchased in it, the lender practices repossession activity in case of a default from the borrower end and takes back the possession of the car and the borrower is denied a title against the asset which is a car in this case.
These loans are often known as home owner loan because normally the collateral comes out to be the home of the borrower and there are provisions of cheap bad credit loans as well because the lender has hardly any thing to do with your adverse credit records in presence of a security against the loan amount as he is legally equipped to take possession of the asset if you again default in your payments.