When someone borrows money from a pawnbroker,the borrower must leave some item of balue as security . if the borrower fails to repay the loan (plis interest), the pawnbroker can sell the pawned item to recober the amount of the loan (plus interest) and perhaps make a profit. The terms of the agreement are recorded on pawn tickets. When a college student borrows money to buy a car, the lender usually hold formal title to the car until the loan is repaid. In this case the official certificate of title issued by the state serves as the security for the loan. A person who borrows money for a vacation may may simply sign in a piece of paper promising repayment with interest. The loan is unsecured in the sense that there is no colletral meaning that no specifie asset has been promised to the lender in the event of default. In such a situation the lender would have to take the borrower to court to try to recover evidence of such loan..
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