Collateral
Collateral is an asset or property pledged as security for a loan. It provides a lender with a source of repayment in case the borrower fails to meet the loan obligations.
Collateral is an asset or property pledged as security for a loan. It provides a lender with a source of repayment in case the borrower fails to meet the loan obligations.
Introduction: Collateral is an asset or property that a borrower offers to a lender as security for a loan. It serves as a lender's protection against the borrower's default, providing a way to recoup the loaned funds if the borrower fails to fulfill the repayment terms. Collateral can vary widely, including real estate, vehicles, machinery, stocks, bonds, and even intellectual property. The type and value of collateral required typically depend on the loan amount, the borrower's credit history, and the lender's policies.
Roles and Importance of Collateral:
Considerations When Using Collateral: