Question

What is Collateral? What is meant by terms of credit

Answer 1

Answer:

Interest rate, collateral and documentation requirement and the mode of repayment together comprise what is called the terms of credit. They may vary depending on the nature of the lender and the borrower.

Explanation:

Collateral is a property or other asset that a borrower offers as a way for a lender to secure the loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses.

Answer 2

Answer:

The term collateral refers to an asset that a lender accepts as security for a loan. Collateral may take the form of real estate or other kinds of assets, depending on the purpose of the loan. The collateral acts as a form of protection for the lender. That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sell it to recoup some or all of its losses.

Collateral is an asset that the borrower owns (such as land, building, vehicle, livestock, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. The terms of credit refer to the interest rate, collateral, the documents required and the mode of repayment when they are taken together.

Explanation:

#Right answer