Secured debt is backed by an asset (collateral) that the creditor can repossess if you default. Unsecured debt has no collateral attached.
Examples of secured debt:
• Home loans (secured by your property)
• Vehicle finance (secured by your car)
• If you default, the creditor can repossess the asset
Examples of unsecured debt:
• Credit cards
• Personal loans
• Store accounts
• Overdrafts
During debt review, both types are restructured, but secured debt typically receives lower interest rate reductions to protect your assets from repossession.