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Banks and NBFCs often categorize loans as secured loans and unsecured loans. Secured loans are those for which borrowers have to pledge some assets as security or collateral against their borrowing. The loan is thus secured against a financial asset or property, gold, etc which the lender can take possession of in case the borrower defaults on repayment and sell it to recover dues. Secured loans have lower interest rate than unsecured loans. Examples are home loan, car loan, loan against property, loan against gold, loan against shares.