Overarching Concepts Flashcards
(5 cards)
1
Q
A
2
Q
What is a Security Interest (SI)?
A
Interest in property created by a security agreement (SA)
A Security Interest provides the creditor rights to the collateral in case of default.
3
Q
What does ‘secured’ mean in the context of financial agreements?
A
Backed by collateral
Secured loans are less risky for lenders because they have the right to take the collateral if the borrower defaults.
4
Q
Define collateral.
A
Any property of value
Collateral can include real estate, vehicles, cash, or other valuable assets.
5
Q
Who is considered a creditor?
A
Anyone owed a legal obligation that can be reduced to a money judgment
Creditors can include banks, individuals, or businesses that have provided loans or credit.
