What Can Be Used as Collateral for a Secured Loan?
Sometimes a little extra money can come in handy. Whether you want to start a business, tackle some home improvement projects or make a big purchase, it's helpful to be able to borrow money. When you do need extra money, you might consider visiting a bank for a loan.
Often, the bank prefers that you secure your loan with collateral because it’s less of a risk for the financial institution to lend you money. Collateral is an asset that you own and pledge against the loan. The bank has the right to seize or take over your collateral if you fail to pay back the loan. Because it can sell the collateral if you don’t pay back your loan, the bank can recoup some of the money. You have a choice of using several different types of assets as collateral, so you have options when you pursue a secured loan.