Social Sciences, asked by Hellbat007, 9 months ago

what is collateral ? why do lenders ask for collateral while lending. Explain​

Answers

Answered by cskooo7
7

Lenders ask for collateral while lending because if payment of interest and repayment of the principal are not made on time, as the last resort the lenders can sell the collateral assets and recover their money

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Answered by ganpattanwar006
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Collateral Definition - Investopedia The term collateral refers to an asset that a lender accepts as security for a 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.

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