A secured loan is one where you have assigned RCU the right to take possession of one or more of your assets if you do not repay the loan within its term.  These assets are specifically identified as part of the loan documentation and serve as collateral for RCU in the event that you default on your loan.  If you default on a secured loan, RCU can take possession of the asset(s) and sell it to recoup any balance outstanding on the debt.  Any amount recouped from the asset(s) sale (less any fees) that is in excess of the outstanding debt balance would be returned to you. Secured loans are more easily obtained and have lower interest rates than unsecured loans.  An unsecured loan is one that is not backed by collateral.