Security in law or business meaning rights in property that protect a lender against loss if the borrower defaults, or fails to repay, a loan. When a piece of property is used as security for a loan, the lendor has a security interest in such property. It is important to distinguish between security interests and securities, which are stocks and bonds that represent equity or debt interests, respectively, in a corporation or other entity.
The laws concerning security interests are separated into laws concerning personal property and laws concerning real property. Security interests in personal property are governed by Article 9 of the Uniform Commercial Code, a form of which is in force in each state. Security interests in real property are governed by the mortgage laws of each state, which vary considerably among the states.