Pooja posted an Question
July 31, 2021 • 16:01 pm 30 points
  • UGC NET
  • Commerce

What is collateral in business law

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  • Pooja 1

    it short collateral means mortgage

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    No Collateral acts as an insurance policy for lenders which can be sold to recover losses when a borrower defaults on their loan. A mortgage is a loan that is taken out by keeping a real estate asset as collateral.

  • Rucha rajesh shingvekar best-answer

    Collateral is an asset or property that an individual or entity offers to a lender as security for a loan. It is used as a way to obtain a loan, acting as a protection against potential loss for the lender should the borrower default. ... For example, if a person wants to take out a loan from the bank.Property or assets that are committed by an individual in order to guarantee a loan. Upon default, the collateral becomes subject to seizure by the lender and may be sold to satisfy the debt. EXAMPLE. In securing a mortgage, the borrower may offer the house as collateral. Mortgages — The home or real estate you purchase is often used as collateral when you take out a mortgage. Car loans — The vehicle you purchase is typically used as collateral when you take out a car loan. Secured credit cards — A cash deposit is used as collateral for secured credit cards.

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