<P> The protection that collateral provides generally allows lenders to offer a lower interest rate on loans that have collateral compared to those without collateral because the risk of loss to the lender is lower . The reduction in interest rate can be up to several percentage points , depending on the type and value of the collateral . For example , the interest rate ( APR ) on an unsecured loan is often much higher than on a secured loan or logbook loan , as the risk for the lender is then increased . </P>
<P> The protection that collateral provides generally allows lenders to offer a lower interest rate on loans that have collateral compared to those without collateral because the risk of loss to the lender is lower . The reduction in interest rate can be up to several percentage points , depending on the type and value of the collateral . For example , the interest rate ( APR ) on an unsecured loan is often much higher than on a secured loan or logbook loan , as the risk for the lender is then increased . </P>
a loan for which a specific asset is used as collateral or pledged
a loan for which a specific asset is used as collateral or pledged
secured loan or logbook loan
secured loan or logbook loan