Collateral covers a multitude of sins. If you have a low credit score, you might normally be declined a loan, but with collateral your lender might be more likely to take that risk because the lender can take ownership of the asset pledged and thus reduce the risk it takes on by loaning to you.

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Drip ? Drop? 5 years, 9 months ago

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Shreya S❤ シュレヤ愛ハーシット 5 years, 9 months ago

It acts a guarantee to the lender

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