Secured Debt
Debt backed or secured by collateral to reduce the risk associated with lending. An example would be a mortgage, your house is considered collateral towards the debt. If you default on repayment, the bank seizes your house, sells it and uses the proceeds to pay back the debt. Investopedia Says:
Assets backing debt or a debt instrument are considered security, which means they can be claimed by the lender if default occurs. Obviously unsecured debt is higher risk, and as such lenders of unsecured money typically require a much higher return. Related Terms:
Blanket Mortgage
Bond
Debt
Debt Security
Debtor
Default Risk
Loan
Secured Note
Unsecured Debt
Writ of Seizure and Sale |