Question

meaning of collateral for 10th
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Answer 1

Class 10th. Answer : Collateral is an asset which is a property of a borrower of loan such as – land, building, livestock, deposits with bank etc. The borrower uses this 'asset' as a guarantee to the lender (the one who gives money) until the loan is repaid by the borrower.

Answer 2

Collateral is the term used to define the security in return for loans.

Explanation:

• Whenever a person goes to the bank to borrow some money, he or she has to provide some sort of security.
• The security allows the bank to be in the confidence of the customer and grant them loans.
• The security that is used to borrow loans or finances from banks or other financial institutions is known as collateral.
• The value of the collateral is generally more than the amount of money that is being borrowed from the financial institution in question.