A security interest in a loan is said to be perfected if the:
A) bank holds the collateral.
B) loan has no protective covenants.
C) borrower is a low credit risk.
D) government guarantees the loan.
E) bank has never lent to the customer before.

Question

Quizplus · Accepted Answer

A security interest in a loan is considered perfected when the bank holds the collateral as a means of ensuring that the loan will be repaid. This provides the lender with a legal claim on the property or assets that were put up as collateral in case the borrower defaults on their loan payments.

A Security Interest in a Loan Is Said to Be