SECURITY INTEREST
Security Interest is a collateral’s legal claim. Typically, the collateral pledged is because of a loan where the borrower gives the lender the guarantee of a security interest for specific assets that is to be repossessed to be sold and used as payment for the loan in case the borrower is unable to make loan payments anymore. Security Interests are normal among auto loans, mortgages, and business loans which are referred as secured loans because of this. Examples of unsecured loans are credit cards in which credit companies are unable to repossess anything in case of inability to pay off the loan.
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