Question

collateral short note for 3 marks.​

Answer 1

Collateral is an asset pledged by a borrower to a lender, usually in return for a loan. The lender has the right to seize the collateral if the borrower defaults on the obligation.

Answer 2

COLLATERAL IS AN ASSET IN WHICH THE LENDER PROVIDES THE BORROWER WITH ANY OF HIS / HER ASSEST LIKE PROPERTY , MONEY ETC

1 ) Banks uses collateral as a means of safety

2) It is an important in terms of credit.

3) Normally , Money lenders or traders do not ask for collateral

they give money to people on the basis of promise of return in future.

4) Collateral is a neccesity

Hope it helps u