Question

Why do banks ask for collatetal while giving loans.

Answer 1

❤️$\huge\mathfrak{HEYA}$❤️

❤️your question : Why do banks ask for collatetal while giving loans?

❤️ANSWER:

A secured loan is a loan that has collateral attached to it. This type of loan generally has a lower interest rate because the bank is taking a lower risk because it can collect the collateral if you default on payments. A secured loan is a good way to build credit. The debt is thus secured against the collateral

❤️HOPE IT HELPS UH❤️❤️

Answer 2

$hello \: mate$

Banks ask for collateral while giving loans because of the following reasons:

➡ If the borrower fails to repay the loans, then the lender will have the right to sell the collateral to obtain the payment.

➡ The loan is secured against the collateral. The borrower uses it as a guarantee to the lender until the loan is repaid.