A purchase money security interest is an interest a creditor automatically obtains when he or she extends credit to a consumer to purchase consumer goods.

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A purchase money security interest (PMSI) is a type of security interest that arises when a creditor extends credit to a consumer to purchase specific types of collateral, such as consumer goods or equipment. The PMSI gives the creditor priority over other creditors and allows them to repossess the collateral if the consumer defaults on their loan obligations.

A Purchase Money Security Interest Is an Interest a Creditor