Question

Give any two examples of collateral security.​

Answer 1

Answer:

collateral is an asset or piece of property that a borrower offers to a lender as security for loan .. An example of unsecured lending is a business credit card . Since the loan is unsecured , credit card typically carry higher interest rates .

Answer 2

Two good examples of collateral security are Cash deposits which are used as collateral security for getting a credit card. Generally for getting a car loan the car that is being purchased  is used as a collateral security for the loan

Explanation:

• The collateral security are the assets which a borrower keeps as a security  for taking a certain loan. For example for taking a loan for purchasing a house the house is kept as a security for the loan.
• If the person defaults on paying back the loan then then the lender can claim the security that has been kept as a collateral for the loan or amount of money the borrower owes.
• Collateral security are necessary since the lenders are taking a risk of lending the money to the borrower. Hence it is necessary that they should be some form of contribution from the borrower for taking the loan and contributing to the risk factor of the lender

To know more about collateral security

What is the basis of collateral security​

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