The obvious risk is the potential to lose ownership of the asset you offered as security. But while having a charge placed over your asset sounds scary, it will not be a problem provided you keep up with your loan repayments. A borrower will not try to take possession of your asset simply because you are slightly late with your repayments, although you should aim to always pay on time in order to protect your credit score. Repossession of your asset is only likely to be the lender’s last resort if you are in serious default and have made no attempt to either repay your remaining loan amount or come to another arrangement with the lender. There are strict rules, which the lender must observe, governing outstanding loan amounts and notice periods. But be aware that defaulting on any kind of loan will seriously damage your credit score, regardless of whether the loan is secured or unsecured.