Loans offered by Mariner Finance may be either secured or unsecured. The determination rests on whether the borrower pledges an asset, such as a vehicle, as collateral to guarantee repayment of the debt. If collateral is pledged, the loan is classified as secured; without it, the loan is unsecured. For example, a borrower might offer their car as collateral to obtain funds from Mariner Finance, rendering that particular borrowing arrangement as secured against the vehicle.
The presence or absence of collateral has significant implications for both the borrower and the lender. Secured arrangements often allow for larger loan amounts and potentially lower interest rates, as the lender has recourse to the pledged asset in the event of default. This reduced risk for the lender can translate into more favorable terms for the borrower. Historically, the practice of securing debts against assets has been a cornerstone of lending, providing a mechanism for risk mitigation and fostering wider access to credit.
