A 'secured loan', as the name suggests, is a loan which provides security to the institution lending the same to a client. These loans, by their very nature, are provided only against the security of a tangible property. The property in question could be a car, house, stocks, land etc. The client availing the loan has to surrender the title deeds of the property owned by him, to the bank or other financial institution providing the loan. The title deeds are retained by the bank/financial institution throughout the term of the loan. This provides an assurance to the lending company, with regard to the proper repayment of the loan. In case of default on the part of the borrower, the lending institution is legally entitled to settle the loan amount outstanding, by offsetting it against the sales proceeds of the tangible property. The risk involved in lending a secured loan is therefore minimal or almost a nullity. This provides for greater transparency in dealings involving secured loans by banks. Moreover, owing to the security provided, the borrower too stands to benefit in terms of lower interest rates and convenient repayment schedules. Certain institutions lend secured loans to borrowers against the security of their bank accounts.
One needs to approach the traditional financial institutions for securing a loan. It would be difficult for unemployed people to obtain a loan but is not impossible. If one provides a proper and high value security to the institution, loan processing would be quick. There are unsecured loans and home equity lines of credit as options available for loans for the unemployed but such funding options are not so easy and they have stringent terms compared to a secured loan.