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Security

Banking and Financial InstitutionsUpdated 11 Nov 2026

In a lending context, security refers to the property that will be pledged to a lender as a guarantee of repayment, which is the same concept more commonly described in full as collateral. A loan backed in this way is described as a secured loan, since the lender has a specific asset it can claim if the borrower defaults.

This use of the word is distinct from the unrelated meaning of security as a tradable financial instrument, such as a share or bond, used in investment and capital markets. For the full explanation of how pledged collateral works, what assets are typically used, and how lenders assess and enforce it, see the main Collateral entry.

Last updated 11 Nov 2026