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If you take a collateral loan, that means you give up ownership of something valuable (i.e. car title) in exchange for a loan. The loan must be paid in a certain amount of time (or by the maturity date). If the loan is not paid back, the creditor can take full ownership of the "valuable" item. If the loan is paid off by the maturity date, then the debtor receives the "valuable" item back.

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Q: What is the meaning of this sentence'' collatral is that asset on which the bank has claim for liquidity and costomer has claim on maturity?
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