Question

what do u mean by the term collateral

Answer 1

Collateral means asset which borrower owns and uses as guarantee to a lender until the loan is repaid.for ex - land,vehicle, livestocks etc.

Answer 2

collateral is an asset that the borrower owns(such as land,buliding,etc) and uses this as a gaurantee to a lender until the loan is repaid.....if the borrower falis to pay back the money then the lender has the right to sell the asset or collateral to obtain payment.....