Which type of loan is guaranteed with owned assets?

A collateral loan is guaranteed by owned assets, which serve as security for the lender. In this type of arrangement, the borrower offers an asset—such as property, vehicles, or other valuable possessions—to back the loan. If the borrower fails to repay the loan, the lender has the right to seize the collateral to recover their losses. This makes collateral loans less risky for lenders, often resulting in more favorable terms for borrowers, such as lower interest rates or higher loan amounts.

In contrast, other types of loans listed do not primarily rely on owned assets as security. For example, a wraparound mortgage typically involves existing financing being wrapped into a new mortgage, primarily for purchasing property. A blanket mortgage covers multiple properties under a single loan but is not specifically about collateralizing with owned assets. A standby loan, often used in commercial finance, does not directly relate to the concept of assets securing a loan. Therefore, it is the nature of a collateral loan to utilize owned assets as guarantees that makes it the correct answer in this context.