Question

define the term collateral security​

Answer 1

Collateral is a property or an other assetthat a borrower offersas a way for lender to secure the loan.If the borrower stop making the promised loan payments the lender can seize the collateral.

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Answer 2

Collateral is an asset that borrowers own (such as land , buildings vehicle etc.) and uses this as a gurantee 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 security to obtain payment.

Some example of collateral security used for borrowing are land titles,deposits with banks, livestocketc.

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