explain the importance of collateral
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collateral is a property or other asset that borrower offer as way for lender to secure the loan
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The term collateral refers to an asset that a lender accepts as security for a loan.The collateral acts as a form of protection for the lender. That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sell it to recoup some or all of its losses.
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