non-possessory security interests
Non-possessory security interests are legal claims that allow a lender to secure a loan using the borrower's property as collateral, without taking physical possession of that property. This means the borrower can continue to use the property while repaying the loan. If the borrower fails to meet their obligations, the lender has the right to take action to recover the outstanding debt, often by seizing the property. Common examples include mortgages and liens, where the property serves as security to protect the lender's interests.
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Non-possessory security interests are legal claims that allow a lender to secure a loan or credit by using the borrower's property as collateral, without taking physical possession of that property. Instead of holding the item, like a car or equipment, the lender has a legal right to it if the borrower fails to repay the loan. This arrangement enables borrowers to retain use of the property while providing lenders assurance that they can recover their money if necessary. Common examples include mortgages on homes or liens on business equipment.