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  2. Feb 23, 2024 · Collateral is an item of value pledged to secure a loan. Collateral reduces the risk for lenders. If a borrower defaults on the loan, the lender can seize the collateral and sell...

    • Julia Kagan
  3. Collateral is an asset thats been pledged as security against credit exposure. Secured loans are supported by collateral; unsecured loans are not. Taking collateral does not make an otherwise bad borrower a good one.

  4. Sep 29, 2023 · Collateral is a valuable asset pledged by borrowers to secure a loan. It acts as a form of protection for the lender, mitigating the risk involved in lending, especially when the borrower may default.

  5. Collateral is property or other assets pledged to a lender to help secure a loan. If someone borrows money, they can agree that their lender can take something from them if they fail to repay the debt. This is known as a secured loan.

  6. Sep 17, 2024 · Collateralization is the use of a valuable asset as collateral to secure a loan. If the borrower defaults on the loan, the lender may seize and sell the asset to offset the...

  7. In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan. [1][2] The collateral serves as a lender's protection against a borrower's default and so can be used to offset the loan if the borrower fails to pay the principal and interest satisfactorily under the terms of the lending ag...