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In-s [12.5K]
3 years ago
7

What is a collateral

Business
2 answers:
Vlad [161]3 years ago
7 0

NOUN

something pledged as security for repayment of a loan, to be forfeited in the event of a default

ADJECTIVE

additional but subordinate; secondary.

True [87]3 years ago
4 0

Answer:

Security for the repayment of the loan.

Explanation:

Collateral is simply called the security that is held by the lender to the person who takes the loan for they risk free payment of the loan back. In simple words, we can say that a collateral is something which is held as a guarantee by the lender till the payment of loan that he gave to an individual or the company. For example people usually put their Houses, plots, shops, their jewelry,  etc, as a collateral in order to get loan from banks or other financial institutions. This collateral servers as a guarantee from the person who is taking the loan. If the person fails to give back the loan, the bank or financial institution will be liable to sell this collateral and get their loan back.

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Explanation:

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