 TITLE: Secured vs. Unsecured Loans: What You Need to Know CONTENT: What Happens if You Default on a Secured Loan?\n----------------------------------------------\nIf you make your payments on time, your collateral remains yours. But if you stop making payments and default on your secured loan, the lender has the right—per your agreement—to take possession of your collateral.\nWhenever you take out a secured loan or line of credit, review your agreement carefully. Being a few weeks—or even a few days—late on a mortgage payment may result in a late fee, but it generally won't trigger a foreclosure. What you want to know is how soon a foreclosure could happen. Learn the same for any auto loan or any other secured loan you may have.\nDefaulting on a secured loan carries the same credit consequences as defaulting on an unsecured loan: It can negatively affect your credit history and credit score for up to seven years. However, with a secured loan, the bad news doesn't end there. You may also lose your home or car. You may forfeit any cash deposit you've put up as collateral. And if the proceeds from the sale of your home, car or other collateral don't cover your entire debt, you may be on the hook for the remaining balance. END