BANKING AFFAIRS

Detailed explanation-1: -Is a mortgage secured or unsecured debt? Mortgages are “secured loans” because the house is used as collateral, meaning if you’re unable to repay the loan, the home may go into foreclosure by the lender. In contrast, an unsecured loan isn’t protected by collateral and is therefore higher risk to the lender.

Detailed explanation-2: -Home loans and car loans are the most common examples of secured loans where the borrower will be required to pledge the vehicle or house to be purchased as collateral, which then become secured debt.

Detailed explanation-3: -Mortgage loans are also commonly known as loans against property. A mortgage loan can be used to either buy or build a house or refinance a property. Refinancing refers to getting a new loan for a property while the original loan is still being repaid. It is usually done to get a loan with better terms.

Detailed explanation-4: -Examples of secured debt include mortgages, auto loans and secured credit cards. Unsecured debt doesn’t require collateral. But missed unsecured debt payments or defaults can still have consequences. Examples of unsecured debt include student loans, personal loans and traditional credit cards.