A secured transaction a loan or other
credit transaction in which the lender is granted a
security interest in
collateral owned by the borrower. The lender is entitled to
foreclose on or repossess the collateral in the event of the borrower's
The secured transaction is governed by a
contract, the security agreement . When the
security interest is perfected the
creditor becomes a secured creditor.
The security interest
is either personal property or real property. A frequent secured
transaction involving personal property is a purchase of a car on credit.
In the U.S., secured transactions in personal property are governed by
article 9 of the Uniform Commercial Code .
The law treats differently secured creditors
from unsecured creditor . The secured creditor will generally always
have priority to getting his money before the unsecured creditors do.