An agreement which signed between parties for the concern of security is called a security agreement. Basically a security agreement will provides the lender a solid interest of security for specified asset or property that a borrower is all set to accord according to the pledged of agreement. To all appearance whenever something has pledged as security for the repayment of a loan is known as security. Well a general sort of security agreement may state as an official document that generate between parties with a security interest in the form of a lien.
As a matter of case this security agreement will allow the parties to take the right patch & keep possession of something belonging to another person until a specific amount of debt owed by this person is discharged or release within a settled period of time. Perhaps the vital objective of security agreement is to clearly describe the interest of security as well as mitigates the default risks the lender may face. Let’s suppose in cases when he/she defaults on debt thus at that time this security interest will allows the lender to sell it in order to satisfy the debt.
Here I can say that a security agreement can be generated for several reasons, such as; it can be use for physical assets, for home security, for vehicle (car, bike, van), for an intangible asset (bank account), & even more. In some cases, the lender may even retain the control on asset, but in some such way if the borrower not returns the amount of money he agreed to repay in contract the lender will be able to seize and sold the asset according to the statement of pledged collateral.