What is a "security interest"?

What is a "security interest"?

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Often, when you buy something on credit, the lender will perfect a security interest. A security interest is a tool that the lender utilizes to register with the Secretary of State of the state that you live in that, in the event you do not pay off the loan that you owe, there's a record that the particular item of merchandise that you purchased has a lien against it. Any future holders of that property, should the property be sold, will have to fulfill that lien before they can own it free and clear.