collateral is an asset that the borrower owns and uses this as a guarantee to a lender until the loan is repaid. Explain this statement with example
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This is also known as a debt-trap. Taking credit involves an interest rate on the loan and if this is not paid back, then the borrower is forced to give up his collateral or asset used as the guarantee, to the lender. ... To repay the loan the farmer may sell a part of his land making the situation worse than before.
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Collateral........
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