Secured Transactions Explained

A secured transaction involves one or more parties providing assurance to pay another party, backed by property as collateral. If the borrower fails to pay, the lender can claim the collateral. The transaction includes a loan, an obligation to repay, collateral, and a security interest. These elements ensure the lender's right to repossess the collateral if the borrower defaults.

How does a security interest relate to collateral?

Identify the key elements that constitute a secured transaction.