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प्रश्न
Answer the following question.
Explain the importance of 'collateral'.
उत्तर
Collateral refers to an asset that a borrower uses as a guarantee to secure a loan. The lender has the right to sell the collateral to obtain payment in case the borrower defaults on the loan and fails to pay it.
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संबंधित प्रश्न
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Formal Sources of Credit Does Not Include
Why do banks or lenders demand collateral against loans?
