A claim on assets or funds taken by a creditor to insure that a loan or debt will be repaid. The security interest may be a portion of a property or asset for which a loan was issued. If the borrower defaults, the pledged security interest is the property of the buyer.
An interest in property created by the operation of law or by agreement to repay a loan; a lien on personal property created by an agreement.
Interest taken by the collateral’s seller, such as an automobile. It is a purchase-money security interest, created by a bank, allowing one to pay off the cost of a car on an installment basis while enjoying its use. The bank retains the title until the full amount (along with interest) has been paid.