Secured loans are more popular because they carry lower interest rates compared with other forms of loans. With secured loans, the debtor can save a lot of money in charges, penalties and interests.
Borrowers are motivated to pay the secured loans promptly because any default can lead to the liquidation of the security. Since the debtor has secured the loans with something of value, the immediate motivation is to pay the loan on time to avoid losing a valuable asset.
In case the debtor declares bankruptcy and, consequently, declares his inability to pay the loan, the collateral is immediately liquidated and sold to cover the amount of the loan balance.