Secured transaction
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Generally, a secured transaction is a loan or credit transaction in which the lender acquires a security interest in certain collateral owned by the borrower and has the right to foreclose or repossess the collateral in the event of the borrower's default. The terms of the relationship are governed by a contract, or security agreement. A common example would be a consumer who purchases a car on credit. If the consumer fails to make the payments on time, the lender will take the car and resell it, applying the proceeds of the sale toward the loan. Mortgages and deeds of trust are another example. In the US, secured transactions in personal property (that is, anything other than real property) are governed by Article 9 of the Uniform Commercial Code (UCC).
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