secured loan: meaning, definition, pronunciation and examples
B2Formal, Business, Financial
Quick answer
What does “secured loan” mean?
A loan backed by collateral, such as property or an asset, which the lender can claim if the borrower defaults.
Audio
Pronunciation
Definition
Meaning and Definition
A loan backed by collateral, such as property or an asset, which the lender can claim if the borrower defaults.
A type of credit agreement that reduces the lender's risk by having the borrower pledge an asset as security. This typically allows for lower interest rates compared to unsecured loans. Common examples include mortgages and car loans.
Dialectal Variation
British vs American Usage
Differences
No significant difference in meaning or usage. The legal frameworks and typical assets used (e.g., differences in mortgage types) may vary, but the term is identical.
Connotations
Neutral and technical in both varieties.
Frequency
Equally common in both UK and US financial contexts.
Grammar
How to Use “secured loan” in a Sentence
[borrower] + take out/obtain + a secured loan + against/on + [asset][lender] + offer/issue + a secured loan + to + [borrower]Vocabulary
Collocations
Examples
Examples of “secured loan” in a Sentence
verb
British English
- The bank required him to secure the loan against his commercial premises.
- They are trying to secure a loan for the new venture.
American English
- We secured the loan with our investment portfolio.
- She's looking to secure a loan to expand the business.
adverb
British English
- [The term itself is not used as an adverb]
American English
- [The term itself is not used as an adverb]
adjective
British English
- The secured loan product had more favourable terms.
- He was reviewing secured loan options.
American English
- The secured loan market is highly competitive.
- They opted for a secured loan arrangement.
Usage
Meaning in Context
Business
Standard term in banking, finance, and corporate lending.
Academic
Used in economics, finance, and law papers discussing credit markets.
Everyday
Used when discussing major personal finance decisions, like buying a house.
Technical
Precise term in legal contracts, financial regulations, and credit risk assessments.
Vocabulary
Synonyms of “secured loan”
Strong
Neutral
Weak
Vocabulary
Antonyms of “secured loan”
Watch out
Common Mistakes When Using “secured loan”
- Using 'secured loan' to refer to any loan with a low interest rate, regardless of collateral.
- Incorrect: 'I got a secured loan from my friend.' (Implies a formal collateral agreement, unlikely in informal settings).
FAQ
Frequently Asked Questions
The lender has the legal right to seize the asset used as collateral (e.g., repossess a car or foreclose on a house) to recover the outstanding debt.
Yes, a mortgage is the most common type of secured loan, where the property being purchased serves as the collateral.
It is often easier than getting an unsecured loan with bad credit, as the collateral reduces the lender's risk. However, the terms (like the interest rate) may still be less favourable.
The primary advantage is typically a lower interest rate compared to an unsecured loan, due to the reduced risk for the lender.
A loan backed by collateral, such as property or an asset, which the lender can claim if the borrower defaults.
Secured loan is usually formal, business, financial in register.
Secured loan: in British English it is pronounced /sɪˈkjʊəd ləʊn/, and in American English it is pronounced /səˈkjʊrd loʊn/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “[None directly associated with the term]”
Learning
Memory Aids
Mnemonic
Imagine a LOAN that is SECUREd with a heavy padlock (the collateral) on your valuable asset.
Conceptual Metaphor
CREDIT IS A LEVERAGED TRANSACTION (where collateral is the fulcrum providing security).
Practice
Quiz
What is the primary defining characteristic of a secured loan?