Question

Q.30- What is collateral? Write any six items that can be kept as collateral.
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Answer 1

Answer:

Explanation:

Collateral is an asset or property that an individual or entity offers to a lender as security for a loan. It is used as a way to obtain a loan, acting as a protection against potential loss for the lender should the borrower default in his payments. In such an event, the collateral becomes the property of the lender to compensate for the unreturned borrowed money.

Things which can be kept as a collateral are land, buildings, vehicles , livestock, any deposit with banks , stocks and bonds, gold .