Question

Why do bank ask for Collateral while giving credit to a borrower

Answer 1

Collateral is a guarantee to the bank so that if the borrower fails to repay the loan, the bank can sell the collateral and obtain the amount.

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Answer 2

Answer:

heyy

Bank ask for collateral while giving credit to borrower because if the borrower fails to repay the loan the bank has right to use or sell the collateral given to him by the borrower so that they can get money which they gave him as a loan.

Hope this helps