What type of loan is secured by collateral, where the lender has a claim against the property if the debt is not repaid?

The correct answer is a secured loan. A secured loan is one where the borrower pledges an asset, typically real estate or personal property, as collateral to secure the debt. This means that if the borrower fails to repay the loan, the lender has the right to take possession of the collateral to recover the outstanding debt. This arrangement reduces the risk for the lender, as they have a tangible asset to claim in the event of default.

In contrast, an unsecured loan does not require collateral, which makes it riskier for the lender because they have no physical asset to claim if the borrower defaults. Subordinated loans typically refer to a loan that is paid after other debts have been settled, which does not directly relate to the collateral aspect. Conventional loans, while they can be secured or unsecured, are generally understood as standard mortgage loans that conform to guidelines set by government-sponsored entities, but the term does not specifically encompass the idea of collateral. Thus, a secured loan is the most appropriate classification here given the context of collateralized borrowing.