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What is collateralized lending?
Collateralized lending is borrowing money against something you own — the asset backs the loan as collateral. If the loan isn't repaid, the collateral can be sold to cover it. Because the lender has that security, collateralized (secured) loans are usually priced lower than unsecured loans, which are backed only by a promise to repay.
How does a collateralized loan work?
You pledge an asset you own — a watch, a piece of jewelry, a vehicle — as collateral. The asset is valued, and you receive a loan based on that value. You keep ownership of the asset the whole time; you're borrowing against it, not selling it.
When you repay the loan on the agreed schedule, you get the asset back. If a loan isn't repaid, the collateral is sold to cover the debt. On MarketLoan, that consequence is disclosed clearly before you accept any offer.
Why is a secured loan usually cheaper than an unsecured one?
An unsecured loan — like a credit card or a personal loan — is backed only by your promise to repay, so the lender prices in the risk that you won't. That risk premium is a big part of what makes unsecured borrowing expensive.
A collateralized loan is backed by a real asset the lender can fall back on, which removes much of that risk. That's the core idea MarketLoan is built on: your loan is actually secured, so it should be priced like it.
Who is collateralized lending for?
It's for people who own valuable assets but want liquidity without selling them. Wealthy households have borrowed against their assets for decades. MarketLoan is being built to make that available to anyone whose wealth is in real things rather than only in a brokerage account.
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