Collateral is an asset that the borrower owns such as land, vehicles, bank deposits etc and use this as guarantee to pay the loan . If the borrower fails to pay loan then bank has right to sell the collateral an obtain money.

It is some assets on the basis of that person is credited and if he or she is unable to repay the loan then that collateral is seized

Collateral (Security) is an asset that the borrower owns (such as land, building, vehicle, livestocks, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.

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<div style="user-select: initial !important;"> <div class="mod" data-md="61" lang="en-IN" style="user-select: initial !important; clear: none; padding-top: 16px; border-radius: 8px; padding-left: 16px; padding-right: 16px;"> <div aria-level="3" class="LGOjhe" data-attrid="wa:/description" data-hveid="CAcQAA" role="heading" style="user-select: initial !important; overflow: hidden; padding-bottom: 20px;">Collateral (Security) is an asset that the borrower owns (such as land, building, vehicle, livestocks, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.</div> </div> </div> </div> </div> </div> </div> </div>