What is a security interest?
Q: What is a security interest?
A: A legal claim on collateral, which can be real estate, personal property or any asset.
Q: What is collateral typically used for?
A: To secure a loan.
Q: Who are the parties involved in a loan with a security interest?
A: The borrower and the lender.
Q: What happens if the borrower fails to repay the loan in a loan with a security interest?
A: The lender can repossess the asset that was used as collateral and sell it to repay the loan.
Q: What is a secured loan?
A: A loan that is secured with collateral.
Q: What is an unsecured loan?
A: A loan with no collateral, such as a credit card.
Q: What happens if there is nothing for the lender to repossess in an unsecured loan?
A: The lender has no collateral to sell to repay the loan.
