In real estate and finance, security refers to real or personal property that is pledged or hypothecated by a borrower to protect the lender’s interest. The property serves as collateral to ensure repayment of a loan or performance of an obligation.
If the borrower defaults, the lender may enforce its rights against the security to recover the debt. Security reduces the lender’s risk by providing a tangible asset that can be claimed or sold to satisfy the obligation.
