Why do lenders ask for Collateral while lending please answer for 3 marks (i. e. 3 points) ?
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Collateral is an asset that the borrower own ls and uses this as a guarantee to a lender until loan is repaid
This is used as an assurance that the loan will be paid back
If the borrower fails to repay the loan, the lender has the right to sell the collateral to obtain payment
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