Secured loans are backed by collateral.
True
False

True! Secured loans are indeed backed by collateral, which means that the borrower offers an asset (like a car or home) to the lender as a guarantee against the loan. If the borrower fails to repay, the lender has the right to take the collateral to recover their losses. This can make secured loans easier to obtain and often come with lower interest rates than unsecured loans.

Understanding secured loans can save you money! Borrowers with good credit may find that offering collateral reduces interest rates, making monthly payments more manageable. However, it’s essential to consider the risks—defaulting on payments could result in the loss of your asset. Always assess your ability to repay before committing!