Give any one Example of collaresal?
Answers
Mortgages — The home or real estate you purchase is often used as collateral when you take out a mortgage. Car loans — The vehicle you purchase is typically used as collateral when you take out a car loan. Secured credit cards — A cash deposit is used as collateral for secured credit cards.
Answer:
While many lenders have not defined "collateral" and instead are left to their own interpretation, there are some things a homeowner or business can do to define the term.
Example:
an individual or business can pledge their personal assets as collateral to secure a mortgage. A bank or other lender will use a lien on your car to secure the loan should you default on your mortgage payment. You will be able to get another loan, at a lower interest rate, but without the worry of your personal assets being put on the line. The lender will also use your property to secure a line of credit, which is often the case in order to make it easier to loan money.