SECURITY INTEREST Meaning and
Definition
-
A security interest refers to a legal right or claim that a lender or creditor has over a borrower's property or assets. It serves as a collateral or guarantee for the repayment of a debt or obligation owed by the borrower to the lender. This interest allows the creditor to have priority or preference in case the borrower defaults on their payment obligations.
Typically, a security interest is created when the borrower and lender enter into an agreement such as a loan or a credit agreement, where the borrower pledges their assets or property as security for the loan. The assets that can be subject to a security interest include real estate, vehicles, inventory, accounts receivable, equipment, and even intangible assets like patents or trademarks.
The security interest is documented through a legal instrument known as a security agreement or a security deed. This agreement outlines the terms and conditions of the loan, including the details of the collateral and the rights and obligations of both parties. It often includes provisions that allow the lender to take possession, sell, or foreclose on the collateral in case of default by the borrower.
The purpose of a security interest is to provide a level of assurance to the lender that they will have some recourse if the borrower fails to fulfill their financial obligations. It gives the lender rights to legally protect their investment and recover any outstanding debts through the sale or disposition of the collateral.
Common Misspellings for SECURITY INTEREST
- aecurity interest
- zecurity interest
- xecurity interest
- decurity interest
- eecurity interest
- wecurity interest
- swcurity interest
- sscurity interest
- sdcurity interest
- srcurity interest
- s4curity interest
- s3curity interest
- sexurity interest
- sevurity interest
- sefurity interest
- sedurity interest
- secyrity interest
- sechrity interest
- secjrity interest
Etymology of SECURITY INTEREST
The term "security interest" is composed of two words: "security" and "interest".
1. "Security": The word "security" comes from the Latin word "securitas", which means "freedom from care" or "safety". It was derived from the Latin word "securus", meaning "free from care". The Latin word "securus" is a combination of "se" (without) and "cura" (care).
2. "Interest": The term "interest" is derived from the Latin word "interesse", which is a combination of "inter" (between) and "esse" (to be). "Interesse" originally meant "to be different" or "to be of importance". Over time, it evolved to refer to a compensation for the use of money or capital.
Similar spelling words for SECURITY INTEREST
- security deposit,
- security guard,
- security blanket,
- securities industry,
- securities firm,
- security system,
- Security Service,
- security force,
- securities law,
- security staff,
- security director,
- security measures,
- securities analyst,
- security department,
- security consultant,
- security review.
Infographic
Add the infographic to your website:
