Collateral loan

A **Collateral loan** is a type of secured loan where the borrower provides an asset, such as property, vehicles, or savings, as security to the lender. This asset acts as collateral, reducing the lender’s risk and often allowing for lower interest rates or larger loan amounts. If the borrower fails to repay the loan, the lender has the right to seize the collateral to recover losses. Collateral loans are commonly used for mortgages, auto loans, and business financing.