If you are considering getting a loan to pay for something that you need or want such as home improvements or a vacation for the family, you may have considered a secured personal loan.  The difference between a secured loan and an unsecured loan is the fact that you have to put up something for security.  If you default on the loan, the lender can take the security and sell it to offset all or some of the remainder of the loan amount owing.  The following are some items that can be used to secure a loan:

• Home – It is possible to secure a loan based on the equity that is available on your home.  Even if you do not have much equity, you may still qualify for this type of loan because of the value of your home versus the amount of the initial mortgage.  In many areas home values are up from what they were purchased at which means that a loan could be obtained on the difference.  It may be more difficult to get a secured personal loan if the home has devalued or if there is not enough equity in it.

• Auto – If you own your car, truck or motorcycle, you may be able to secure a loan with the title of your vehicle.  The lender will require you to submit your title to them and you do not receive it back until you pay off the loan.  You can keep your vehicle while paying off the loan; it is only surrendered if you go into default.  Keep in mind that this type of loan does require a vehicle to be less than a certain age and it must be in good running condition.  A physical inspection is typically required when using a vehicle as security.

• Electronics and Appliances – If you have ever purchased anything on credit such as a stereo or washing machine, this is a secured loan.  The items that you have purchased are considered the security.  If you default, the items are repossessed to offset the loan amount.

A secured personal loan is simply a loan that has an item attached to it, which can be used to recover losses if the loan is not paid off.  Homes, vehicles and other items can be considered as security for these loans.  If there is no security, then the loan is considered to be unsecured.