Secured Debt

[si-KYURD det]

What is the definition of Secured Debt?

Debt that is backed by the pledge of collateral or other assets, providing the lender with a claim to specific property if the borrower defaults.

Using Secured Debt in an Example

A common example of secured debt is a mortgage loan, where the property being purchased serves as collateral. If the borrower fails to make the agreed-upon payments, the lender has the right to seize the property to recover the outstanding debt.

Using Secured Debt in a sentence

To finance the new equipment, the company took out a secured debt, pledging some of its assets as collateral to obtain better loan terms.

Related Terms

Surviving Spouse

A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.

Learn More

Swap

A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.

Learn More