ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Security
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Collateral
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Property
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All of these
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Detailed explanation-1: -The asset that a borrower owns and uses as a guarantee until a loan is repaid to a lender is known as collateral.
Detailed explanation-2: -The types of collateral that lenders commonly accept include cars-only if they are paid off in full-bank savings deposits, and investment accounts. Retirement accounts are not usually accepted as collateral. You also may use future paychecks as collateral for very short-term loans, and not just from payday lenders.
Detailed explanation-3: -In a secured loan, the lender has a legal claim against a borrower’s assets. If the borrower defaults, the lender can convert the assets to cash to be repaid. The assets in a secured loan are referred to as collateral.
Detailed explanation-4: -Collateral is an asset of some sort that a borrower pledges as a guarantee of repayment of a debt or loan. Should the borrower default on the agreed repayments, the lender would have the right to take possession of the pledged asset, known as collateral.