Category Archives: Collateral

Collateral Explained

In lending agreements, collateral is a borrower’s pledge of specific property to a lender, to secure repayment of a loan. The collateral serves as protection for a lender against a borrower’s default – that is, any borrower failing to pay the principal and interest under the terms of a loan obligation. If a borrower does [...]

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Why Do Lenders Require Collateral?

Getting an unsecured business loan is nearly impossible these days unless you are tremendously wealthy, a multi-national organization or don’t really need the money. Thus, collateral does matter. You can’t offer something for collateral that you do not own, such as the loan itself, or property that you intend to purchase. However, banks and other [...]

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