Secured loans are loans that are backed by collateral, which is an asset that the lender can claim if you fail to repay the loan. Common examples of secured loans include mortgages (where the home is the collateral) and auto loans (where the vehicle serves as collateral).
Because secured loans involve collateral, they generally come with lower interest rates compared to unsecured loans. This is because the lender faces less risk; if you default, they can recover their losses by seizing the collateral. However, if you fail to make payments, you could lose the asset that was used to secure the loan.