As such, secured home loans often offer better interest rates than unsecured loans, but offer higher risk to borrower, as defaulting on these loans can have greater consequences, such as fines, or even possible repossession of home originally put up as secured collateral (subject to amount of loan, of course).

As interest rates for secured home loans are usually significantly lower than unsecured loans, more of monthly payment goes towards paying off capital, rather than paying accrued interest.

The monthly payments are often more flexible in secured loans, affording borrower more leeway in working out a payment plan that fits his or her needs. However, care must be taken not to use this as justification for taking out such a loan, as it is a financial contract between lender and borrower.

Secured home loans, also called home equity loans, are loans backed by borrower's equity in their property. Equity is difference between your home's appraised value and balance on your mortgage.

When a homeowner takes out a secured home loan, they promise to repay lender and sign a contract that makes their home collateral for loan. If borrower does not repay loan as agreed, lender has right to foreclose on home. Generally, loans are repaid with a monthly payment over a fixed term.

As interest rates and loan terms may vary widely depending on your credit score, your home equity, and amount of loan, it is important to compare several different lenders to ensure you are getting best loan for your situation.