Question

why do lenders ask for Collateral while giving the money

Answer 1

Here is your answer Dear...

⭐Lenders ask for collateral because,

1. It acts as a proof that a loan has been taken from the lender

2. It secures the lender in case the borrower do not return the money with interest.

3. Te collateral helps the lender in getting back his money with interest...

Hope it helps you out ⭐^_^⭐
Thanks ⭐^_^⭐(^^)⭐

Answer 2

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➾ Lenders ask for collateral as security against loans.

➾ If the borrower fails to repay the loan.

➾ The lender has the right to sell the asset or collateral to obtain repayment.