Secured loans require borrowers to pledge collateral (an asset like a car or property) to secure the loan. The lender can seize the collateral if the borrower defaults on the loan.
- Benefits:
- Typically lower interest rates compared to unsecured loans.
- Larger loan amounts may be available.
- Eligibility:
- Varies depending on lender and collateral type. Often requires ownership of a vehicle or property with sufficient equity.
- Good credit history may be preferred.
- Stable income is essential.
- Common Secured Loans in Zambia:
- Vehicle title loans (using a car as collateral)
- Land title loans (using property as collateral)
- Equipment loans (using business equipment as collateral)