Angelica took a second mortgage on her home as collateral for the loan. This scenario best describes a secured loan.
A secured loan is one in which the borrower pledges property as security, turning the pledged property into a secured debt owing to the creditor who provided the loan.
Interest rates are frequently lower than they would be without collateral because secured loans are seen as less risky. Making a cash deposit up front may provide you the chance to establish credit with secured credit cards and loans if unsecured credit is not an option.
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