Why do banks ask for collateral …

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Why do banks ask for collateral while giving loans

Posted by Meenakshi Rajput 7 years ago

CBSE > Class 10 > Social Science

2 answers

Yogita Ingle 7 years ago

Bank ask for collateral while giving credit to borrower because if the borrower fails to repay the loan the bank has right to use or sell the collateral given to him by the borrower so that they can get money which they gave him as a loan.if the borrower gives the loan in time than the bank gives collateral back to borrower.

2Thank You

H H 7 years ago

Bank needs proper documentation while giving credit. Bank needs collateral for the recovery of money if a borrower is unable to give money back.

2Thank You

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