A loan obtained by pledging a tangible asset as collateral for the loan. The loan is said to be secured by the collateral. If the debt is not repaid in accordance with the terms of the loan, the creditor is legally entitled to seize the collateral asset and sell it to satisfy a portion of the remaining debt. If the collateral does not satisfy the entire debt, the debtor remains responsible for the difference in amount. As secured loans are considered less risky than unsecured loans they typically are offered at a lower annual percentage rate.