Question

Collateral can be beneficial for borrowers when applying for a loan by
a. offering lenders additional financial gain if borrowers defaults on their loans
b. lessening the total loan amount, making it easier for borrowers to be approved
C. giving lenders protection against financial loss and more reason to approve loans
d. demonstrating that borrowers have ownership of high-end goods and can obviously make their
loan payments
Please select the best answer from the choices provided.
A
B
C
D

Answer 1

The answers is C. Giving lenders protection against financial loss and more reason to approve loans

Answer 2

When applying a loan, Collateral can be beneficial to the borrower because:   (C). giving lenders protection against financial loss and more reason to approve loans

Meaning of Loan and collateral

Loan is a form of debt incurred by an individual as a result of recieving money from an individual or organization that will repaid within a definite period.

collateral can be defined as any asset (example: car, house, land etc) that is offered by the borrower to the lender to secure a loan.

it is very important because the lender is secured that if you cant repay the loan he takes the asset.

In conclusion, when taking a loan, collateral is important.

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