A secured loan is a type of loan that involves a collateral in order for the loan to be approved for the borrower. The collateral used for most secured loans are usually a property or properties of the borrower such as a car, a house or some other valuable property.
In cases when the collateral is a house and the house is fully owned by the borrower, the loan is taken against the market value of the house. When the collateral house of the secured loan still has mortgage remaining, the loan is taken against the equity of the house. The equity of the house is calculated as the market value of the house minus the remaining loan or mortgage of the house.
There is a special kind of secured loan that allows for a loan to be taken against a savings account. This is called a savings secured loan and is usually available only in banks and credit unions. This kind of loan is limited to the value of the savings used as collateral. When a savings secured loan is approved, the savings is frozen by the bank or credit union but will still gain interest. The savings provides security for the lender in the case when the borrower is unable to meet the monthly payment of the secured...
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