Secured loan guide

Last updated:

Secured Loan backed by an asset such as property or a vehicle

Understand how secured loans work, the common types, and what to check before pledging an asset. Submit an enquiry to discuss your options.

  • Backed by an asset such as property, a vehicle or deposits.
  • Pricing and limits depend on the asset and lender policy.
  • The lender can act on the asset if repayments are missed.
Check eligibility Documents checklist
Secured Loan enquiry Step 1 of 2
Get started

Enquire about Secured Loan

Share your details in a few clicks and our team will connect with you.
Details used only for your enquiry

Thank you for your enquiry

Thanks for sharing your details. Our team will review your requirement and connect with you shortly.

We will contact you soon
+91

By proceeding, you agree to our Terms and Privacy Policy

See our Privacy Policy Our team will contact you
Secured loan basics

What is a secured loan?

A secured loan is a loan backed by an asset you pledge as security, such as a property, a vehicle, gold, a fixed deposit or investments. If the loan is not repaid as agreed, the lender can use that asset to recover its dues, subject to the agreement and the law.

Because the lender has security, it looks at the value of the asset as well as your income and credit history. That is why secured loans can differ from unsecured loans in the amount, tenure and rate offered. The trade-off is that you put the asset at risk, so borrow only what you can comfortably repay.

Secured loan at a glance

Security
Property, vehicle, gold, deposits, investments or other accepted assets
Common types
Home loan, loan against property, vehicle loan, gold loan
Lender looks at
The asset's value and title, and your income and credit history
Repayment
EMIs, or as agreed for products such as gold loans
Main risk
The lender can act on the asset if dues are not paid
Eligibility

Secured loan eligibility

A lender checks you and the asset. Criteria differ by lender and product; commonly reviewed factors are:

  • Ownership and clear title of the asset you offer.
  • The asset's value, as assessed by the lender, and how much it will lend against it.
  • Regular income from salary, business or profession.
  • Your credit history and existing obligations.
  • Co-owners of the asset joining the loan or giving consent, where the lender requires it.

Documents required for a secured loan

Along with your KYC and income documents, you need papers for the asset. The exact list depends on the product and lender.

KYC and income documents

  • KYC: PAN card, Aadhaar or other identity and address proof, and photographs.
  • Income proof: salary slips or income tax returns, depending on employment.
  • Bank statements.
  • Business proof and financial statements, for self-employed applicants.
How it works

Secured loan process: step by step

The steps depend on the asset. A gold or deposit-backed loan can be quick, while a property-backed loan adds legal and valuation checks. The usual sequence is:

  1. Choose the product

    Pick the product that matches your goal and the asset you have: home loan, loan against property, vehicle loan, gold loan or another option.

  2. Application and documents

    You submit KYC, income documents and the papers for the asset you are offering.

  3. Asset check and valuation

    The lender verifies ownership and title and values the asset. The amount it lends depends on this value.

  4. Sanction letter and Key Fact Statement

    If approved, you receive the amount, rate, tenure and charges with a Key Fact Statement (KFS) showing the APR. Compare it with other offers before you accept.

  5. Agreement and charge on the asset

    You sign the agreement, and the lender's charge is created on the asset, for example a mortgage on property or hypothecation of a vehicle.

  6. Disbursal and release

    The loan is paid out. When you repay in full, the lender releases the asset and its documents and removes its charge.

Banks and NBFCs regulated by the RBI must give you a Key Fact Statement, including the annual percentage rate (APR) and repayment schedule, before you sign a retail or MSME term loan agreement. Source: RBI circular on Key Facts Statement, 15 April 2024.

For home loans and other loans the RBI classes as personal loans, regulated banks and NBFCs must return your original property documents and remove any charge registered on the property within 30 days of full repayment or settlement, and compensate you for delays caused by them. Source: RBI circular on release of property documents, 13 September 2023.

Plan your EMI

Know your EMI before you pledge an asset

Enter a loan amount, the interest rate from your offer and a tenure to see the monthly EMI and the total interest you would pay.

  • Make sure the EMI fits your budget even in a difficult month. Missed EMIs put the asset at risk.
  • A longer tenure lowers the EMI but increases the total interest.
  • Compare offers using the APR in the Key Fact Statement.

Example only, not an offer

Estimated monthly EMI  
Total interest
 
Total repayment
 

Reducing-balance calculation. It excludes fees and charges. Open the full EMI calculator

Secured or unsecured

Secured vs unsecured loan

With an unsecured loan, such as most personal loans, you do not pledge anything. The lender decides mainly on your credit history and income.

With a secured loan, the asset gives the lender another way to recover its money. That is why lenders can offer different amounts, tenures or rates on secured products. The amount usually depends on the value of the asset, and the lender keeps a charge on it until you repay.

Either way, missed payments are reported to credit bureaus and lower your credit score. With a secured loan, you can also lose the asset.

Unsecured: personal loan Secured: loan against property

Secured vs unsecured loans

SecuredUnsecured
Security SecuredAn asset such as property, a vehicle, gold or a deposit UnsecuredNo asset is pledged
Lender mainly looks at SecuredYour profile and the value of the asset UnsecuredCredit history, income and existing EMIs
Process SecuredAdds checks on the asset's title and value UnsecuredFewer checks, as there is no asset
If dues are not paid SecuredCredit score impact, and the lender can act on the asset UnsecuredCredit score impact and recovery as per the agreement
Options

Types of secured loan

The right secured loan depends on what you need the money for and what asset you have. Availability and terms depend on the lender.

Home loan

To buy, build or renovate a home. The home is mortgaged to the lender until the loan is repaid.

Loan against property

Funds for business or personal needs against a residential or commercial property you already own.

Vehicle loan

To buy a car, two-wheeler or commercial vehicle. The vehicle is hypothecated to the lender.

Gold loan

A loan against gold jewellery or coins, which the lender holds until you repay.

Loan against fixed deposit

A loan or overdraft against your deposit, usually with the same lender. The deposit keeps earning interest.

Loan against securities

A loan against shares, mutual funds, bonds or insurance policies the lender accepts.

Know the full cost

How to compare secured loan offers

When you are pledging an asset, compare carefully:

  • Compare the APR in each Key Fact Statement, which includes the lender's charges.
  • Ask how much the lender will lend against your asset, and how it values the asset.
  • Check the total interest over the tenure, not just the EMI.
  • Check what happens if the asset's value falls, for example with gold or shares, and whether you may need to add security.
  • Check prepayment terms and how quickly the asset is released after you repay.

Estimate your EMI and total interest with the EMI calculator

Charges to check in your sanction letter and KFS

Secured loans often carry charges linked to the asset. Charges differ by lender, so check each of these in writing:

Processing fee

Charged for assessing your application.

Valuation and legal charges

For valuing the asset and checking its title.

Stamp duty and registration

On the mortgage or other security documents, as per your state.

Prepayment and foreclosure charges

What you pay to close the loan early, if the lender is allowed to charge.

Late payment charges

Penalties if an EMI is missed or paid late.

Release charges

Any fee for releasing the asset or documents. Ask about these before you sign.

For floating-rate loans to individuals for non-business purposes, sanctioned or renewed on or after 1 January 2026, regulated lenders cannot charge for prepayment. Source: RBI (Pre-payment Charges on Loans) Directions, 2 July 2025.

What affects your secured loan offer?

  • The type, value and title of the asset.
  • Your income, credit score and existing obligations.
  • The amount and tenure requested.
  • The lender's own policy, fees and charges.
Compare

Home loan vs loan against property vs vehicle loan vs gold loan

Home loan Loan against property Vehicle loan Gold loan
Security The home being financed A property you already own The vehicle being financed Gold jewellery or coins
Use of funds Buying, building or renovating a home Business or personal needs, as the lender allows Buying the vehicle Most legitimate needs, as the lender allows
Who holds the asset You live in the home; the lender holds a mortgage You keep using the property; the lender holds a mortgage You use the vehicle; the lender is noted on the RC The lender holds the gold until you repay
Typical tenure Long Medium to long Short to medium Usually short
Process Checks on you and the property Checks on you and the property Checks on you and the vehicle Gold tested and valued at the branch

Swipe the table sideways to see all four options.

Amounts, rates and charges differ by lender, by your profile and by the asset, so compare actual offers rather than product types alone.

If you were declined

Why secured loan applications are declined

A secured loan can be declined because of you or because of the asset. Common reasons include:

  • Title problems: unclear ownership, disputes, or missing approvals for a property.
  • An asset valued lower than expected, or a type of asset the lender does not accept.
  • A low credit score, or missed payments or defaults in your credit history.
  • Income that is too low or irregular for the EMI.
  • Co-owners who do not join the loan or give consent where required.

Before you reapply, get the asset's papers in order, check your credit report and correct any errors, and reduce existing dues where you can. A smaller amount or a different asset may also be easier to approve.

Borrow safely

You are putting an asset at risk. Protect yourself:

Borrow only from RBI-regulated banks and NBFCs. If you are unsure about a lender, check that it is a bank or an NBFC registered with the RBI.

Check that the lender's name on the sanction letter and agreement matches the lender you applied to, including when you apply through an app or an agent.

Never pay an upfront fee to "get a loan approved". Genuine fees are disclosed in writing by the lender.

Do not share OTPs, PINs, passwords or card details with anyone who calls or messages you about a loan.

Read the loan agreement fully before you sign, and keep a copy of every document you sign.

Keep copies of every asset document you hand over, and get a written receipt listing them.

FAQs

Secured Loan – frequently asked questions

What is a secured loan?

A secured loan is backed by an asset you pledge, such as property, a vehicle, gold, a fixed deposit or investments. If the loan is not repaid as agreed, the lender can use the asset to recover its dues, subject to the agreement and the law.

What is the difference between a secured and an unsecured loan?

A secured loan is backed by an asset the lender can use to recover dues. An unsecured loan, such as most personal loans, has no such asset, so the lender relies mainly on your credit history and income.

Why do borrowers choose secured loans?

Because the lender has security, secured loans can offer different amounts, tenures or rates compared with unsecured loans, depending on the lender and the asset. They also suit purposes such as buying a home or vehicle.

What assets can I use for a secured loan?

Common examples are residential or commercial property, vehicles, gold, fixed deposits, and investments such as shares, mutual funds or insurance policies. Each lender decides which assets it accepts.

How much can I borrow against an asset?

It depends on the asset's value as assessed by the lender, the lender's policy for that asset type, and your income and credit profile. The lender confirms the amount in the sanction letter.

Does the lender take possession of my asset?

It depends on the product. You keep living in a mortgaged home and using a hypothecated vehicle, while gold and some deposits are held by the lender until you repay.

What happens if I miss payments on a secured loan?

You may pay late charges, your credit score can fall, and if dues stay unpaid the lender can act on the asset as per the agreement and the law. Talk to the lender early if you expect difficulty.

When do I get my property documents back?

After you repay the loan in full. For home loans and other loans the RBI classes as personal loans, banks and NBFCs regulated by the RBI must return the original property documents and remove any charge registered on the property within 30 days of full repayment or settlement.

Is a home loan a secured loan?

Yes. A home loan is secured by the property being bought or built, which is mortgaged to the lender until the loan is repaid. Loans against property and vehicle loans are also secured loans.

Why was my secured loan application rejected?

Common reasons include unclear title or missing approvals for the asset, a valuation lower than expected, a low credit score, income that is too low for the EMI, or co-owners not joining the loan.

Related Guides from the CredBazar Blog

View all guides

How to enquire about a secured loan with CredBazar

  1. Submit your enquiry

    Fill in the short form on this page with your basic details and loan requirement.

  2. Talk to our team

    The CredBazar team gets in touch to understand your requirement and explain the next steps.

  3. Complete the application

    Share the documents the lender asks for. Approval and final terms are decided by the lender.

About CredBazar. CredBazar helps you connect with lenders for your loan requirement. CredBazar is not the lender: whether your loan is approved, and the interest rate and terms you are offered, are decided by the lender.

The information on this page is general guidance and is not an offer of credit. Loan approval, interest rates, fees, tenure and other terms are decided by the lender and depend on your profile. Please read the lender's terms before you proceed.

Not sure which secured loan fits your goal?

Submit a short enquiry and the CredBazar team will get in touch with you.

Enquire now