Secured Debt

Written By Melissa Cook
Feb 14, 2023
Facebook Share Icon LinkedIn Share Icon

Secured debt refers to a type of debt that is backed by collateral, which serves as security for the loan

This means that the lender has a claim on a specific asset or group of assets if the borrower fails to repay the loan according to the agreed-upon terms. In other words, the collateral provides the lender with a level of protection in the event of a default by the borrower.

There are various types of assets that can be used as collateral, including real estate, vehicles, stocks, bonds, and savings accounts. 

The value of the collateral determines the amount that the borrower is eligible to receive, and it also plays a role in the interest rate charged on the loan. If the borrower defaults, the lender has the right to seize the collateral and sell it to recover the outstanding balance.

Secured debt is often used by borrowers with poor credit who may not be eligible for unsecured debt, such as a personal loan. 

In this case, the collateral can be used to mitigate the risk of default, which makes it easier for the borrower to obtain the loan. Additionally, because the loan is backed by collateral, the interest rates for secured debt are typically lower than those for unsecured debt.

One of the main advantages of secured debt is that it can provide the borrower with access to larger loan amounts. This is because the lender is able to offer a loan based on the value of the collateral, rather than relying solely on the borrower’s creditworthiness. 

For example, if a borrower wants to purchase a house, they can use their home as collateral to secure a mortgage.

Another advantage of secured debt is that it can be used to improve the borrower’s credit score

This is because the loan is reported to the credit bureaus, which can help demonstrate the borrower’s ability to repay debt. Over time, a good track record of on-time payments can lead to an improvement in the borrower’s credit score, which can make it easier to obtain future loans and credit card offers.

However, there are also some disadvantages to secured debt that borrowers should be aware of. 

For example, if the borrower defaults on the loan, the lender has the right to seize the collateral. This can result in the loss of a valuable asset, such as a home or car, which can have a significant financial impact. 

Additionally, if the collateral decreases in value, the borrower may owe more than the asset is worth, which can result in a shortfall if the lender must sell the asset to recover the outstanding balance.


See how Americor can help

Check Your Options

About Americor

Americor provides debt solutions to thousands individuals and families all over the country. We’re a next-generation debt relief company with a proprietary platform designed to help clients get out of debt quickly. Together we’ll develop a strategy for you to enjoy a debt free lifestyle. Learn more about how Americor can help relieve the burdens of debt today.

18200 Von Karman Ave, 6th Floor Irvine, CA 92612
New Clients:
[email protected]
Existing clients:
[email protected]

We provide debt resolution services. Our clients who make all monthly program payments save approximately 40 – 50% of their enrolled debt (average of 43%) upon successful program completion, before program fees. Fees are based on a percentage of your enrolled debt at the time of starting the program and range from 15%-25% of your enrolled debt. Programs range from 20-48 months. Clients must save at least 25% of each debt due to an enrolled creditor before a bona fide settlement offer will be made. On average, clients receive their first settlement within 4-7 months of enrollment and approximately every 3-6 months thereafter from when the prior debt was settled. Not all Clients complete the program. Estimates are based on prior results and may not match your results. We cannot guarantee that your debts will be resolved for a specific amount or percentage or within a specific timeframe. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting, legal advice or credit repair services. Our program is not available in all states; fees may vary by state. Some programs may be offered through The Law Firm of Higbee & Associates d/b/a Advantage Law. The use of debt resolution services will likely adversely affect your credit. You may be subject to collections or lawsuits by creditors or collectors. Your outstanding debt may increase from the accrual of fees and interest. Any amount of debt forgiven by your creditors may be subject to income tax. Clients may withdraw from the program at any time without penalty and receive all funds from their dedicated account, other than funds earned by the company or fees paid to third-party service providers, as may be applicable. Read and understand all program materials prior to enrolling. Certain types of debts are not eligible for enrollment. Some creditors are not eligible for enrollment because they do not negotiate with debt relief companies. To determine the offers you may be eligible for, Americor conducts a “soft credit pull.” This credit pull does not impact your credit score, creditworthiness, or ability to obtain credit from other sources. The soft pull is not a tradeline entry, it does not report against your score and will only take a few minutes.

Americor Funding, LLC (18200 Von Karman Ave, 6th Floor Irvine, CA 92612) is fully accredited by the Better Business Bureau (BBB), the American Fair Credit Council (AFCC), and the International Association of Professional Debt Arbitrators (IAPDA). CA Department of Financial Protection and Innovation (DFPI) License # 603K913.

Copyright © 2022 Americor Funding, LLC dba Americor Financial. All rights reserved