If the value of the collateral securing a secured loan is less than the secured interest, the secured creditor is an oversecured creditor.

Name: If the value of the collateral securing a secured loan is less than the secured interest, the secured creditor is an oversecured creditor.
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When the value of the collateral is less than the secured interest, the creditor is considered undersecured, not oversecured. Oversecured status applies when the collateral's value exceeds the debt.

If the Value of the Collateral Securing a Secured Loan