Secured loans are backed by some form of collateral. For example, if you take out a mortgage to buy a new house, the house serves as collateral. Car loans work the same way. The automobile for which you obtain a loan becomes the collateral to secure the debt. When a borrower defaults on a secured loan, the lender can seize the collateral to cover the outstanding debt, which is why secured loans pose lower risks for banks and credit unions.
With a CD-secured loan, your certificate of deposit acts as collateral. CD loans allow you to retain your investment and get the additional cash you need. CD-secured loans are personal loans, meaning you can use the money for almost any expense.
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