Secured debt
A secured debt is borrowing that is tied to an asset, usually your home, which the lender can sell if you do not keep up the repayments.
Also known as: secured debts, secured loan
Mortgages and secured loans are the most common examples. Because the lender has a legal charge over the property, falling behind can eventually lead to a court order for possession. Hire purchase and some car finance agreements work similarly, with the lender able to recover the vehicle.
Secured debts are treated as priority debts. Think carefully before securing a loan on your home, particularly to repay unsecured debt, because it turns a debt with limited consequences into one that puts your home at risk.
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