What is a secured bank loan?

Secured bank loans are essentially loans which require the borrower to offer some of his/her assets as security against the loan amount. The assets which are offered as collateral usually include homes, property or cars and are valued by the bank prior to the loan sanction. The secured bank loan also implies that the bank retains the right to seize your assets which were offered as security in case you fail to repay the loan in the specified amount of time. There are various other important clauses in the agreement apart from these which should be carefully read and understood before finalizing the loan.

Car loans, home loans, pre settlement loans are some forms of secured bank loans. For instance, a customer takes a car loan to purchase a car for his personal use, but then is unable to repay due to extenuating circumstances. In this case the bank has the right to repossess the car to protect their finance amount. The bank can also auction the car in order to recover the remaining loan amount. A similar thing also happens in the case of home loans where the house is foreclosed if the customer fails to make the monthly payments.