Glossary
Secured
A loan backed by an asset the lender can seize if you default — a house, a car, or a deposit.
A secured loan pledges an asset — the home behind a mortgage, the car behind an auto loan, a savings deposit behind a secured card — as collateral. Because the lender can recover its money by taking that asset, secured loans carry lower rates and larger limits than unsecured ones. The trade is real risk: fall behind and you can lose the collateral, which is why turning unsecured card debt into a secured HELOC deserves caution.
Related terms
- HELOC A revolving credit line secured by your home, usually at a variable rate — draw and repay as needed, like a credit card backed by the house.
- Bridge loan A short-term loan that "bridges" a gap — most often financing a new home purchase before your current home sells.
- Charge-off When a creditor gives up trying to collect a debt through normal billing and writes it off as a loss — typically after 180 days of non-payment.
- Lien A legal claim against property that secures a debt — the lienholder can force a sale to collect if the debt goes unpaid.
- Unsecured A loan that requires no collateral — approval rests on your credit profile and income.
- Underwriting The process a lender uses to verify your income, assets, debts, and credit before approving a loan — the "yes or no" behind every offer.