Secured debt is debt that is backed or secured by collateral. This collateral can be a mortgage, lien, or a pledge of another valuable asset. This security reduces the risk of lending, as if the debtor defaults on the loan, the creditor may seize and sell the collateral to recoup losses and pay back the debt amount.
- Service Charge
A service charge is an extra fee that a customer pays for services relating to the primary product or service they are purchasing. This additional charge tends to be added at the time of transaction and is paid directly to the company. It may cover services provided to the customer, or any associated administrative or processing costs. In financial terms, service charges may apply for the maintaining of accounts or processing of transactions by banks.
- State Bank
A state bank is a bank chartered by states to conduct the primary business of providing commercial banking services. Different to a central, reserve or national bank, the Office of the Comptroller of the Currency (OCC) does not regulate these financial institutions in the U.S. The Federal Reserve may regulate them. However, as they do not have federal charters, state banks are not permitted to expand nationwide. They may have more authority in providing private banking services and insurance solutions than national banks in some states.
- Stop Payment
A stop payment is a request from an account holder to a financial institution to cancel a payment or check that has been issued but has not yet processed. This service generally incurs a fee. If the account holder issues a stop payment order before the recipient processes the check or payment, then the funds will not be debited from the account of the payer. If the account holder does not request the stop payment in time, then the financial institution may be unable to halt the payment process. There are many reasons why a person may request a stop payment, such as errors on the check or the cancellation of orders after the check is sent.