Final answer:
Secured loans are guaranteed by an asset of the borrower known as collateral.
Step-by-step explanation:
Secured loans are guaranteed by an asset of the borrower known as collateral. Collateral is an item of value that the borrower pledges to the lender as a guarantee of repayment. If the borrower defaults on the loan, the lender has the right to seize and sell the collateral to recover the funds owed.