In real estate and commercial finance, a security interest is the legal interest a creditor holds in the property of a debtor to secure payment or performance of an obligation. It gives the creditor rights in the collateral until the debt is satisfied.
Under the Uniform Commercial Code, the term security interest replaces older terminology such as chattel mortgage, pledge, trust receipt, equipment trust, and inventory lien. This unified concept standardizes how secured transactions are created, perfected, and enforced across different types of personal property collateral.
