Secured loans work by using an asset, such as your home, as collateral. When you apply for a secured loan, the lender will assess the value of your asset to determine the loan amount you qualify for. The amount you can borrow is typically a percentage of the value of the asset.
The more valuable the asset, the higher the loan amount you can secure. In exchange for this collateral, lenders offer lower interest rates and more favourable terms, making a secured loan a cost-effective borrowing option.