Justify with three logics the necessity of collateral for a loan.
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Loan Availability
If a borrower is agreed on collateral there are more chances to get loan and will get higher amount.
People with low credit
Those having bad credit and return history of the loan will easily get loan on collateral as people by collateral are more willing to give loan to even people having bad reputations.
Loan Return
there is surety of getting loan back from any person when you have a collateral as the loan person knows that you have something of him.
Collateral Determines the Loan Value
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