ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Foreclosure is the legal process by which banks auction/sell collateral property to pay off defaulted debt. Repossession is when property (like a car) is taken back by the bank when payments on the same property are defaulted.

Detailed explanation-2: -A collateral loan is a type of secured loan requiring a borrower to pledge an asset to avail of the loan. The asset, called a ‘collateral, ’ is liquidated by the lender in case the borrower defaults. On the other hand, unsecured loans do not require the borrower to pledge collateral.

Detailed explanation-3: -Hypothecation means offering an asset as collateral security to the lender. The ownership lies with a lender, and the borrower enjoys the possession. In the case of default by the borrower, the lender can exercise his ownership rights to seize the asset.

Detailed explanation-4: -Types of Collateral You Can Use Cash in a savings account. Cash in a certificate of deposit (CD) account. Car. Boat.

Detailed explanation-5: -Real Estate Collateral. Business Equipment Collateral. Inventory Collateral. Invoices Collateral. Blanket Lien Collateral. Cash Collateral. Investments Collateral. 17-Feb-2021