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Secured Creditor

Definition - What does Secured Creditor mean?

A secured creditor is a person who possesses a secured debt over a debtor. In other words, a secured creditor is a person who has allowed another person to borrow money and has an interest in the borrowers personal belongings if the borrow does not pay him or her back. A financial institution that gives someone a loan to purchase a car is a secured creditor. If the debtor doesn't make their payments, the financial institution can repossess the vehicle. The vehicle is the security.

Justipedia explains Secured Creditor

One of the most common forms of a secured debt is a mortgage and one of the most common secured creditors is a bank. In this situation, the bank pays the seller of the house the full price of the house up front, and then the buyer of the home pays back the bank over time with interest. The bank is a secured creditor in this situation because if the buyer of the home does not pay the bank back in a timely manner, then the bank can foreclose on the home and sell it on the open market.

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