Question

Explain the importance of collateral​

Answer 1

I hope u understand this answer

Thanks

Answer 2

For lender *

1-Collateral is any thing that used by

the lender recover it's money that

he/she give to borrower , in case if

the borrower will unable to repay credit with interest .

2- It also ensure that the borrower

will repay the credit as he/she

does not want to lose is collateral.

For borrower*

1- He/she can take credit(loan) by it to

the lender.

2- It also ensure for the borrower the

He/She would traped in dept.