Secured Line Of Credit: Everything You Need To Know About It

When it comes to getting credit, it can be secured or unsecured. A secured line of credit (SLOC) is used by businesses worldwide. It is mainly used to get loans on assets. With the help of this credit, business owners can get funds securely. Moreover, SLOC offers the flexibility to withdraw funds whenever you want.

The advantage of secured credit is that you only need to pay interest on the amount you use. That means you have full control over the cash. But how are you going to apply for this line of credit?

You may wonder about the key difference between secured and unsecured lines of credit. To get answers to all your secured credit questions, read this post till the end.

What Is A Secured Line Of Credit?

In simple words, a secured line of credit is a fund for business or personal use. Valuable assets are used to get it. At the time of loan approval, the lender asks for assets until you repay the whole credit. Various assets like homes, bonds, and stocks can be used as protection.

If the borrower cannot repay the credit, the lender has the right to seize the assets. These loans are secured because they bring less risk for lenders and borrowers. Most of the SLOC offer flexible installation facilities too.

Features Of A Secured Line Of Loan

There are many reasons why a secured line of loans is popular today. Today people want secure finance, which is flexible and takes less interest rate.

Following are the top features of SLOC:

  • It has flexible repayment options.
  • Have faster approval than regular loans.
  • It can obtain from personal assets like property, stocks, and homes.
  • SLOC has a low-interest rate.
  • Non-salaried individuals can also get this line of credit.
  • It offers customizable loans as per your needs.
  • After repayment of the full secured line of loan, the CIBIL score improves.

Type Of Secured Line Of Loan

Businesses and individuals have the option to choose from different types of SLOC. Every line of credit is available to fulfill the needs of the borrower. Although, secured loans allow you to use your assets to get credit. But it is easy for borrowers to use the specific asset to get secured credit. Following are the different types of Secured credit:

Stock SLOC

You can use your stock secured line of credit to get a loan. The best part of this SLOC is that you still own that stock. While using the loan, you still get the benefits of stocks like dividends.

It is a great option for businesses or individuals who:

  • Have a stock that is listed in NASDAQ, NYSE, and AMEX.
  • Need a credit between $25,000 to $1,000,000.
  • Want to cover tech projects, taxes, and medical bills.
  • Looking for secure repayment options.

In the stock SLOC, you will get the variable rate on your loan. Moreover, it gives you control over your stock during repayment.


This SLOC is the loan you take by using your savings account. You can also use other assets to obtain a loan in a cash secured line of credit. It is a great option for small businesses with $50,000 annual revenue. In this SLOC, lenders have the right to freeze your savings account if you are unable to repay the loan.

In cash secured loan, you will get the following benefits:

  • Fixed interest rates.
  • Loan amount of $20,000 to $100,000.
  • Fast approval of credit
  • Flexibility to build your credit.
  • Rates of 4.25%-6.50% APR.
  • Repayment time of 12-120 months.

Home Equity SLOC

In the home equity secured loan, the credit value is secured by your home’s market value. The loan amount is determined by calculating the credit minus the amount owed by the borrower. Some of the benefits of using home equity secured credit are as follows:

  • Interest rates are deductible only when you use funds to improve your home.
  •  The duration of the loan is a minimum of 10 years.
  • The credit limit of this SLOC is 75-80% of the market value of your home.
  • There is a possibility to extend the loan over time.

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Difference Between The Secured And Unsecured Line Of Credit

The major difference between secured and unsecured LOC is the type of asset. It is a way to provide a guarantee to the lender for the repayment of credit. As a result, it is easier for lenders to offer a SLOC at lower risk.

The table below shows the difference between secured and unsecured LOC:

Key points Secured Line of Credit Unsecured Line of Credit
Credit amount Large amount of credit Smaller amount of credit
Term of credit Long repayment terms Short term of repayment
Rate of interest Flexible interest rate High rate of interest
Time for approval Slow approval rate as collateral is required to get credit. Fast approval rate of credit
Requirements Must have assets like stock, home, bonds, etc. It is easier for anybody to apply for this LOC. It is harder to apply for this type of LOC. The lender seeks security in the form of a credit score.
Type of credits It includes the following types of SLOC:

  • Mortgage loans
  • Credit card loans
  • Personal loans
  • Car loans
It includes the following types of unsecured line of credit:

  • Student credit
  • Unsecured personal loans
  • Unsecured credit card loans

Advantages Of Using SLOC

Following are the advantages of using secured credit:

  • The major advantage of using a secured loan is lower interest rates. This SLOC has flexible rates, which include high risks.
  • It allows you to borrow a particular sum of money. A secure line of credit gives you access to a set fund for a definite period.
  • SLOC offers you more loan options that are not available in other loans. Using your asset creates a lower risk, which opens more loan options.

Disadvantages Of SLOC

Following are the disadvantages of using SLOC:

  • There is a probability that you may lose your assets. If you cannot repay the credit to the lender, they have the right to seize your asset.
  • Secured credit includes additional fees like annual, transaction, and closing costs.
  • When you have SLOC, there is a probability that you use funds for everyday expenses. Thus, you end up paying more to the lender.

How Do I Apply For A Secured Line Of Loan?

Getting a secured line of a loan includes a step-by-step process. Before you start the application process, you must have an asset that can be used as collateral.

Follow the steps shown below to apply for SLOC:

  • First, choose a secure line loan provider like banks, private lenders, and government institutions.
  • After that, provide the documents which verify your business details. Your name, location, tax ID, and bank details will be.
  • Now, complete the online application form.
  • Then, the lender verifies the credibility of your asset.
  • Next, you will receive a confirmation mail that includes the agreement. It contains your name, details, credit limit, and interest rates.
  • Once you agree with the terms and conditions of SLOC, you can claim the credit.


Businesses or individuals can use assets to get a secured line of credit. It is an effective way to get funds with lower risk. Also, lenders look for collateral in assets while giving a secured loan. You can request various types of loans like stock, cash, and money SLOC. This form of credit has its pros and cons. Thus, having an expert while planning to get a secured credit loan is essential.

Alnicor Consulting offers all kinds of lines of credit at flexible interest rates. Our experts determine your business capability and suggest you the credit at easy terms. We will also assist you throughout the application process. Thus, contact us if you seek secured credit in the shortest possible time. Call us at 183-325-6267 or 18332111777. You can also use our mail id for inquiries.


What Is The Interest Rate Of Secured Credit?

The interest rates of a secured loan line depend on the lender. The average range of rate for SLOC is 3.75 to 18%.

Is A Line Of Credit A Debt?

A line of credit is also bank debt. It depends on the asset used by the borrower for taking this loan. The lender uses this asset as a security for the future.

Which Is Best, From The Secure And Unsecured Line Of Credit?

Both lines of credit have their advantages and disadvantages. You have flexibility, a low-interest rate, and security with secured credit. The SLOC is best for you if you have an asset to lend for the fund.

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