Question

can somebody tell me the proper definition of collateral.(economics class 10)

Answer 1

Collateral is a property or other asset that a borrower offers as a way for lender to secure the loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses. A lender's claim to borrower's collateral is called a Leon.

Answer 2

Answer:

In economics, collateral refers to assets that a borrower pledges as security for a loan. These assets can be used to secure the loan and ensure that the lender will be reimbursed if the borrower cannot repay the loan.

Explanation:

Examples of common forms of collateral include real estate, vehicles, and other personal property. Financial assets such as stocks, bonds, and savings accounts can also be collateral. Collateral can be any property or asset with a value and can be sold to pay off the loan if the borrower cannot do so.

In general, the more valuable the collateral, the lower the risk for the lender and, therefore, the better the loan terms may be for the borrower. Collateral is considered a secondary source of loan repayment, the primary being the borrower's creditworthiness and income. Lenders will also look at the value of the collateral and how easily it can be sold in case the borrower defaults on the loan.

To learn more about collateral, from the given link.

https://brainly.in/question/2321229

To learn more about reimbursed, from the given link.

https://brainly.in/question/5921444

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