Secured Debt


DEFINITION of '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.

BREAKING DOWN 'Secured Debt'

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.

  1. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  2. Debt Security

    Any debt instrument that can be bought or sold between two parties ...
  3. Default Risk

    The event in which companies or individuals will be unable to ...
  4. Writ Of Seizure And Sale

    An order issued by a court that allows the petitioner (usually ...
  5. Debtor

    A company or individual who owes money. If the debt is in the ...
  6. Unsecured Loan

    A loan that is issued and supported only by the borrower's creditworthiness, ...
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