All In One - Economics

Book: All In One - Economics

Chapter: 3. Money and Credit

Subject: Social Science - Class 10th

Q. No. 8 of Self Assessment

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Why do bank demand collateral while issuing a loan?

Collateral is an asset that borrower owns. The collateral can be anything that has monetary value in it. The bank demands the collateral for the guarantee against their repayment for the credit. Collateral can be land, building, gold, vehicle, etc.


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