Collateral is an object of value used to confirm a loan. Collateral minimizes the risk for lenders. If a borrower defaults on the loan, the lender can hold the collateral and sell it to recoup its casualties. Mortgages and car loans are two kinds of collateralized loans.
Collateral is just an asset, such as a car or home, that a borrower presents as a way to qualify for a certain loan. Collateral can make a lender comfier extending the loan since it shields their financial stake if the borrower ultimately fails to repay the loan in full.
To learn about Collateral visit the link
brainly.com/question/6779619
#SPJ4
