What do you mean by collateral security?

Q&ACategory: FinancialWhat do you mean by collateral security?
Rakesh asked 1 year ago
1 Answers
FinMargin Expert answered 1 year ago

Collateral security literally means security against which you may take a loan. It is directly related to the debt or loans. Everyone wants security to safeguard their interest before giving loans. This security offered by the borrower to the lender acts as collateral security. In case the borrower defaults on making full repayment, then the lender may sell off this collateral in his possession to compensate for the loan given.
There are various kinds of collateral security which may be secured or non secured form. If you want quick and easy sanction of loan without delay then try offering secured collateral. Getting secured collateral, the lender feels he has more control over the loan sanctioned, thus mitigating his risk and better chances of him approving your loan.
Want to know what are different kinds of secured collaterals available? Just click below to have complete details on it.