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PLACING SOMETHING OF VALUE DOWN AS A GUARANTEE OF PAYMENT ,WHICH YOU WILL LOSE IF YOU DEFAULT .
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∙ 15y ago
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Define collateral security?
Collateral security is extra security provided by a borrower to back up his/her intention to repay a loan.
What does collateral refer to?
security for a loan or outside of what was intended (collateral damage)
What is the difference between security and collateral security?
Security is broader, including guarantees etc. Collateral is something specific that can be seized upon default, like a house, car, or shares.
What is the different between security and collateral security?
Security is broader, including guarantees etc. Collateral is something specific that can be seized upon default, like a house, car, or shares.
Is personal guarantee a collateral security?
In some cases, yes. But mostly - not. Something should be given as a collateral security - whether it is a written agreement or an item to be surrendered.
Accounting-what is a collateral security?
Lying alongside a debt
Can be used in security for borrowing meaning?
collateral for a loan
What something of value pledged as security for a loan?
Collateral
What is the security for the repayment of a secured loan called?
Collateral.
What would be good collateral for a lease agreement?
A good collateral for a lease agreement would be a tangible property, such as a house, motor vehicle, financial collateral as well as intellectual security.
What is difference between Prime Security Collateral Security?
Prime security is the one which is funded by banks for raw material, power, finished goods etc are taken by bank as prime security. The collateral security, which is non-funded by banks. But in turn the borrower keep it as security with bank. Such as any mortgage, Fixed asset etc
What is the difference between a primary security and a collateral security?
Primary security is the security someone offered to a bank to cover any risk the bank faces by granting a credit facility to a borrower. However, sometimes a single security may not be sufficient to cover the risk.Example: X bank grants a credit facility of $100 to a borrower called 'B,' and the borrower offers a bare land of $60 to the bank as the security. As you can see, the is bank facing a risk of $40.To cover up the balance of the credit risk, the borrower needs to offer another security. This new security is known as a collateral security.In that case, any security other than the primary security is a collateral security.It is very common that collateral securities are used to cover more than a single credit facility risk. Collateral securities are generally used to cover the balance of the risk, which is unable to cover by primary. However, the actual value of the collateral security is much higher than that. (Example: The borrower 'B' offers a commercial property of $60 as the collateral security of above loan. Now he can apply for another loan by offering the balance of $20 of the same property.)
