Secured loans are loans or credits for which you must present certain collateral, depending on the conditions. These are usually certain rights over parts of your assets.
Common collateral for the bank is, for example, a land charge or mortgage on your own property, building savings contracts or even securities. Guarantees are also common, which means that other people must vouch for you in the event of your inability to pay.
Collateral and equity requirements increase the application effort for you and also make the processing and review process significantly more laborious and lengthy. Furthermore, secured loans are usually significantly less flexible and tie up parts of your assets for many years.
Collateral and equity are often required to meet regulatory standards despite your high qualifications and payment record. These are not necessarily related to the individual customer and therefore do not adequately reflect the ability of the borrower to meet its payment obligations.