Secured Credit
A loan in which a security interest in a title, asset or influence is held by the creditor to ensure the repayment of the loan.
If the loan goes in to default, the creditor can enforce their security interest. These loans can be either installment or revolving. The advantage is that these loans generally offer lower interest rates and longer repayment terms. The disadvantage is that you can not use that asset for any other financial purpose until the loan is paid in full and you can lose whatever asset secures the loan if a default occurs.
This is a complicated area of law and an attorney should be consulted on all matters relating to bankruptcy. The information on this website is provided with the understanding that the authors and publishers are not herein engaged in rendering bankruptcy, legal, insolvency, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional bankruptcy, insolvency, tax, legal or other competent advisors. While we have made every attempt to ensure that the information contained in this website has been obtained from reliable sources, Credit Advisors Foundation and Arbor Investment are not responsible for any errors or omissions, or for the results obtained from the use of this information.