Question

26.2 Why does a bank ask for collateral while lending?
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Answer 1

Answer:

The lenders ask for a collateral before lending because: It is an asset that the borrower owns and uses this as a guarantee to the lender – until the loan is repaid. Collateral with the lender acts as a proof that the borrower will return the money.

Explanation:

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Answer 2

Answer:

bank ask for collateral because if some thing happened to you or if unfortunately death they take the collateral for the money