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A savings secured loan is a type of loan wherein you use your savings in your account as collateral against a loan amount. Usually, banks will give you 100 percent of your savings as loan. The amount equivalent to the loan amount is frozen in your account but it will still continue to earn interest. As the loan is repaid, the secured portion of the savings account is freed.
You can be sure that a savings secured loan will help you learn to save money. Once you take the loan, make sure you pay the monthly installments to the bank. Once the loan amount along with the interest is paid back, keep on paying the installment amount to yourself so that you can save the money instead of spending it needlessly.
Some of the key benefits of savings secured loan are as follows:
- As you are using your money as collateral, you can be sure to get approval for the loan amount.
- You get immediate access to the loan amount.
- It is an excellent way of establishing good credit history.
However, in order to get a savings secured loan, you have to have a savings account with the lender. This is advantageous to both the lender and the borrower. If the borrower defaults on the loan, the collateral is already in the lender’s possession so his risk is very low. The borrower benefits as the lender will usually offer a lower interest rate for this type of loan.
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A secured loan is a type of loan wherein the borrower pledges an asset like car, home or property as collateral for the loan amount. The loan amount is secured against the collateral and incase the borrower defaults on the loan, the lender can take possession of the secured asset and sell it to recover the money lent to the borrower. 
