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What is Purchase Price Guarantee Interest (PMSI)? The term purchase guarantee (PMSI) refers to a legal claim that allows a lender to either repossess property financed with their loan, or to demand repayment in cash if the borrower defaults. It gives priority to the lender over claims made by other creditors. In simpler terms, a …

What is secured debt? Secured debt is backed by debt or secured by collateral to reduce the risk associated with the loan. If the borrower on a loan defaults, the bank seizes the collateral, sells it, and uses the proceeds to pay off the debt. Assets backed by a debt or debt instrument are considered …