Collateral vs. Lien

SDA1C
SDA1C Posts: 2,072
edited March 2012 in The Clubhouse
I thought we could talk about collateral and liens.

I have a class that is required...It's a finance class and not the most challenging but none the less its required. We recently got onto the topic of collateral as it plays towards the security or acquisition of a personal loan. One of my classmates has used a lien as an example of collateral. I have tried to explain to him that it's the house, boat, car, stereo hehe that is the collateral and the lien is nothing more than a financial instrument that notes who gets the collateral in case of default but he doesn't seem to get the point. What say all of you and do you have any suggestions on how I can be more clear in my explanations?

Thanks, 1c
Too much **** to list....
Post edited by SDA1C on
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Comments

  • shack
    shack Posts: 11,154
    edited March 2012
    Collateral is stuff...a lien lets someone take that stuff if you don't do what you agreed (or are legally obligated) to do.
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  • SDA1C
    SDA1C Posts: 2,072
    edited March 2012
    I called about half a dozen banks just to be sure there wasn't some glitch on the nomenclature for commercial or real estate but all the answers were the same.
    Too much **** to list....
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  • coolsax
    coolsax Posts: 1,824
    edited March 2012
    I'm a real estate loan officer.. you are correct in your contrasting of what a lien and what collateral are. collateral is the item that the lien is being place against.
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  • cstmar01
    cstmar01 Posts: 4,424
    edited March 2012
    It can't really get much simpler than what they said.
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  • SDA1C
    SDA1C Posts: 2,072
    edited March 2012
    That's what I thought but for some reason I don't think reason is involved with this feller lol. To be frank there are just 2 of us that are more than 2 years out of HS in this class. I am more concerned with the younger kids not being mislead by erroneous information.
    Too much **** to list....
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  • cstmar01
    cstmar01 Posts: 4,424
    edited March 2012
    As long as the teacher knows what they are talking about that really is all that matters. Unless this Guy is the teach in which case he shouldn't be teaching.
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  • SDA1C
    SDA1C Posts: 2,072
    edited March 2012
    Yea she is addressing the situation as we speak. should be interesting as this guy is a e-6 Navy. And we all know how Swabbies are...LOL Semper FI!
    Too much **** to list....
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  • obieone
    obieone Posts: 5,077
    edited March 2012
    SDA1C wrote: »
    Yea she is addressing the situation as we speak. should be interesting as this guy is a e-6 Navy. And we all know how Swabbies are...LOL Semper FI!

    Find out what his 'rating' is/ was. Sounds like a Boatswains'mate:razz:
    I refuse to argue with idiots, because people can't tell the DIFFERENCE!
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  • SDA1C
    SDA1C Posts: 2,072
    edited March 2012
    obieone wrote: »
    Find out what his 'rating' is/ was. Sounds like a Boatswains'mate:razz:



    AHAHAHA! My thought's exactly. Enough rate that his stupidity is dangerous lol. Hard to broach that topic now without causing issues I think. I pretty much told him how it was so any communication at this point would be considered inflammatory I am sure. Not nearly the sense of humor that this forum has. Cant really **** with attitude there and not hear about it.
    Too much **** to list....
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  • steveinaz
    steveinaz Posts: 19,538
    edited March 2012
    I think you nailed it. Some people can't be helped...LOL
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