secured transaction
secured transaction, defined:
a transaction that uses collateral as a means of guaranteeing an obligation of payment. In a secured transaction the borrower grants the lender the right to seize the collateral should the borrower default on the debt (a security interest).
secured transaction, as it might be used:
The bank argued that it had the right to collect a fee for furnishing the statement of obligation with respect to the secured transaction.
An example of secured transaction:
Fergus and Fiona are shopping for a new car when they spot the perfect model. They negotiate terms with the car dealer and secure financing through their credit union. When they sign the loan documents, they are completing a secured transaction: the credit union pays the dealer and takes the title to hold as collateral until Fergus and Fiona have paid off the loan.
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Clear-Point Law Dictionary
