How is a secured loan rate calculated?

A secured loan is calculated using an asset as a hedge against possible default. They are generally safer loans than unsecured loans, such as money borrowed on credit cards, and they usually carry lower interest rates. If someone defaults on their mortgage or car payment, then the bank can repossess the house or car to pay off the debt by selling it. The better credit score someone has, the lower the interest rate will be for a secured loan, be it a mortgage or an auto loan. Interest is calculated with an APR based on the principal amount of the loan.