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What is collateral? Explain.

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What is collateral? Explain.
  • 4 answers

Harsh Janghu 5 years ago

An asset that is owned by borrowers and uses as a guarantee to a lender till loan time loan is repaid
Collateral is an asset that the borrower owns (such as lands, buildings ,vehicles ,livestock and deposits with bank ) and uses this as a guarantee to a lender until the loan is repaid.
Collateral is an asset or form of physical wealth that the borrower owns like house, livestock, vehicle etc. It is against these assets that the banks provide loans to the borrower.

Yogita Ingle 5 years ago

Collateral is an asset or form of physical wealth that the borrower owns like house, livestock, vehicle etc. It is against these assets that the banks provide loans to the borrower. The borrower uses assets as a guarantee to a lender until the loan is repaid.

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