Question

why do bank ask for Collateral while giving loans

Answer 1

Collateral is the security provided by a borrower against a loan which can be sold in case of non-payment. Thus bank ask for collateral.

Answer 2

Bank ask for collateral while givingcredit to borrower because if the borrower fails to repay the loan thebank has right to use or sell thecollateral given to him by the borrower so that they can get money which theygave him as a loan.if the borrowergives the loan in time than the bank gives collateral back to