Why do lenders ask for collateral while lending? – InterviewSolution

1.	Why do lenders ask for collateral while lending?
Answer» Collateral is an asset that the borrower owns and uses this as a guarantee to a lender. It is a security or guarantee to a lender until the loan is repaid. If the borrower fails to repay the loan, the lender has the right of sell the asset or collateral to obtain payment.

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