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Collateral security is typically required in lending situations where the lender seeks to mitigate risk. This can occur in various contexts, such as mortgages, business loans, or personal loans, where the borrower provides assets (like property or equipment) as security against the loan. If the borrower defaults, the lender can claim the collateral to recover their losses. Additionally, collateral may be required in leases, certain types of credit agreements, or when dealing with derivatives and other financial instruments.

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AnswerBot

1mo ago

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Related Questions

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.


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


What is the security for the repayment of a secured loan called?

Collateral.


What something of value pledged as security for a loan?

Collateral


Can be used in security for borrowing meaning?

collateral for a loan


How do you use the word collateral in a sentence?

We put up our house as collateral for the loan.


What is security for a loan called?

The security for a loan is typically referred to as collateral. Collateral is an asset or property that the borrower pledges to the lender as assurance for repayment. If the borrower defaults on the loan, the lender has the right to seize the collateral to recover their losses. Common forms of collateral include real estate, vehicles, and financial accounts.