secured loan
' secured loan ' is related to totally ' 30 ' matches
Nonrecourse_debt | Default_(finance) | Debt_consolidation | Mortgage | National_Economic_Stabilization_And_Reco | Loan | Finance | Economics | Security_interest | Financial_modeling | Triple_net_lease | Reverse_mortgage | Collateral_(finance) | KBC_Bank | Peanut | Bankruptcy | Debt | Credit_card_debt | Unsecured_loan | Predatory_lending | Harvey_F._Barnard | Debt-snowball_method | Personal_finance | SLM_Corporation | Student_loan | Stafford_loan | Equifax | Experian | Debtor | Unsecured_debt |
' secured loan ' search sugestions are totally ' 1 ' matches
Secured_loan,

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral (finance) for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower default (finance) the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally lent to the borrower, for example, foreclosure of a home. From the creditors perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. If the sale of the collateral does not raise enough money to pay off the debt, the creditor can often obtain a deficiency judgment against the borrower for the remaining amount. The opposite of secured debt/loan is unsecured debt which is not connected to any specific piece of property and instead the creditor may only satisfy the debt against the borrower rather than the borrowers collateral and the borrower.

Purpose

There are two purposes for a loan secured by debt. In the first purpose, by extending the loan through securing the debt, the creditor is relieved of most of the financial risks involved because it allows the creditor to take the property in the event that the debt is not properly repaid. In exchange, this permits the second purpose where the debtor may receive loan on more favorable terms than that available for unsecured debt or to be extended Credit (finance) under circumstances when Credit (finance) under terms of unsecured debt would not be extended at all. The creditor may offer a loan with attractive interest rates and repayment periods for the secured debt.

Types

*A mortgage loan is a secured loan in which the collateral is property, such as a home. *A nonrecourse debt is a secured loan where the collateral is the only security or claim the creditor has against the borrower, and the creditor has no further recourse against the borrower for any deficiency remaining after foreclosure against the property. *A foreclosure is a legal process in which mortgaged property is sold to pay the debt of the defaulting borrower. *A repossession is a process in which property, such as a car, is taken back by the creditor when the borrower does not make payments due on the property. Depending on the jurisdiction, it may or may not require a court order.

United States law of debt secured by property

In the case of real estate the most common form of secured debt is the lien Liens may either be voluntarily created, as with a Mortgage law or involuntarily created, such as a mechanics lien A mortgage may only be created with the express consent of the title owner without regard to other facts of the situation. In contrast, the primary condition required to create a mechanics lien is that real estate is somehow improved through the Manual labour or material provided by the person filing a mechanics lien Although the rules are complex, consent of the title owner to the mechanics lien itself is not required. In the case of personal property the most common procedure for securing the debt is described through the Uniform Commercial Code or UCC. This statute provides a system of forms and public filing of documents by which the creditor s interest in the property is made known. In the event that the underlying debt is not properly paid, the creditor may decide to foreclose the interest in order to take the property Generally, the law that allows the secured debt to be made also provides a procedure whereby the property will be sold at public auction or through some other means of sale. The law commonly also provides a right of redemption whereby a debtor may arrange for late payment of the debt but keep the property.

How to create secured debt

Debt can become secured by a contractual agreement Lien#Statutory liens or judgment lien Contractual agreements can be secured by either a Security interest (PMSI) loan, where the creditor takes a security interest in the items purchased (i.e. vehicle, furniture, electronics); or, a Non-Purchase Money Security Interest (NPMSI) loan, where the creditor takes a security interest in items that the debtor already owns.

See also

*Bankruptcy *Capital structure *Debt arbitration * Loan guarantee *Second lien loan *Seniority (financial) *Senior debt *Subordinated debt *Title loan *Unsecured debt

References

External links

*http://www.law.cornell.edu/topics/mortgages.html Mortgage Law] *http://www.securedloanshelp.net/2009/03/what-is-a-secured-loan What is a Secured Loan?] (html) *http://www.classfinance.co.uk/Cameleon/News/Secured%20Loan/Why_a_Secured_Loan When is a secured loan right for you?] Category:Finance Category:Business terms Category:Personal finance Category:Debt ar:قرض بضمان إضافي es:Crédito pignoraticio