Why do banks ask for collateral while giving credit to a borrower ? -SST 10th

1 Answer

Answer :

Collateral is a guarantee to the bank so that if the borrower fails to repay the loan, the bank can sell the collateral and obtain the amount.

Related questions

Description : A legal agreement between the lender and borrower where real estate property is used as a collateral for the loan is termed as ________ A. Mortgage B. Reverse Mortgage C. Repossession D. Refinance

Last Answer : A. Mortgage Explanation: A loan that is secured by property or real estate is called a mortgage. In exchange for funds received by the homebuyer to buy property or a home, a lender gets the promise of that buyer to pay back the funds within a certain time frame for a certain cost.

Description : A loan which is secured by collateral and for which borrower is not personally liable is called __________ A. Secured loan B. Syndicated loan C. Non-Recourse loan D. No Documentation loan

Last Answer : C. Non-Recourse loan Explanation: A non-recourse debt is a type of loan that is secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral ... any further compensation, even if the collateral does not cover the full value of the defaulted amount.

Description : What is collateral ? Why do lenders ask for collateral while lending ? Explain. -SST 10th

Last Answer : Collateral is an asset owned by the borrower like land, building etc, and is used as a guarantee to the lender till the loan is repaid. Lenders ask for collateral because: 1. It serves as a ... . 2. In case of failure of repayment of the loan, the lender can take the collateral as compensation.

Description : Why do lenders ask for collateral while lending ? -SST 10th

Last Answer : Lenders ask for collateral as security against loans. If the borrower fails to repay the loan, the lender has the right to sell the asset-or collateral to recover the payment. Collateral assets ... defaults on repayment of loan. It is for this reason that lenders ask for collateral while lending.

Description : A very large loan extended by a group of small banks to a single borrower is known as ______ A. Secured loan B. Syndicated loan C. Non-Recourse loan D. No Documentation loan

Last Answer : B. Syndicated loan Explanation: A syndicated loan is a loan offered by a group of lenders (called a syndicate) who work together to provide funds for a single borrower. The borrower could be a ... government). The loan may involve fixed amounts, a credit line, or a combination of the two.

Description : A prospect means 1. any customer who walks into the bank 2. an employee of the bank 3. a customer who is likely to be interested in bank's product or service 4. a depositor of the bank 5. a borrower of the bank

Last Answer : a customer who is likely to be interested in bank's product or service

Description : Why do lenders ask for collateral while lending?

Last Answer : Feel Free to Answer

Description : 1. In situations with high risks, credit might create further problems for the borrower. Explain. -Economics 10th

Last Answer : In situations with high risks, credit might create further problems for the borrower. Credit involves a certain amount of loan that is taken by a borrower from a lender at a high-interest rate. In case ... the borrower. The borrower also has to sell a part of his or her land to repay the loan.

Description : Explain the terms 'collateral' and 'terms of credit'. -SST 10th

Last Answer : Collateral is an asset that the borrower owns (such as land, building, vehicle, livestock, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. The terms ... one credit arrangement to another. They may vary depending on the nature of the lender and the borrower.

Description : Why does the formal or informal sector ask for a collateral? -SST 10th

Last Answer : . Every loan agreement specifies an interest rate which the borrower must pay to the lender along with the repayment of the principal. . In addition, lenders may demand a collateral or an asset ... and the mode of repayment are the terms of credit required for formal or informal sectors for loans.

Description : Explain the values which a borrower should observe for the proper use of loan taken. -SST 10th

Last Answer : 1. A borrower, firstly, needs to be financially independent as well as capable of repayment of a loan taken for various economic activities such as business set up, agricultural needs or ... (profit) in order to establish himself and also contribute towards the country's wider development aspect.

Description : What would the lender do in case the borrower fails to repay the loan? -SST 10th

Last Answer : If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.

Description : Dont you just hate it when you ask for a genuine personal answer or view here, and you know somebodys just cut and pasted some web page ? Giving no credit to who/what they stole it from?

Last Answer : Fluther mods don’t tolerate plagiarism. If you see it, report it by flagging the quip.

Description : Neither a borrower nor a lender be. Agree?

Last Answer : Good advice. Either way, you always get burned.

Description : What happens if you make your final mortgage payment but the primary borrower on the mortgage is deceased?

Last Answer : It is not a matter of who is on the note, it is who is on the deed. This would probably change according to state laws. The house might have needed to go into probate upon the holder of the deed’s death. In some states it just automatically goes to the spouse (in the absence of a will.)

Description : When a borrower receives a discount loan the interest total is subtracted from the principal and the borrower receives the remainder what is remainder of the loan called?

Last Answer : loan proceeds

Description : A financial instrument is called a 'primary security' if ii represents the liability of : (1) some ultimate borrower (2) the Government of India (3) a primary cooperative bank (4) a commercial bank

Last Answer : (1) some ultimate borrower Explanation: Instruments (certificates) issued by the ultimate borrower are called primary securities. Instruments issued by intermediaries on behalf of the ultimate borrower are ... the business / project of the borrower for which the credit facility has been extended.

Description : Taking back of property by a seller or a lender from the buyer or borrower due to default of payment is termed as ________ A. Reconveyance B. Repossession C. Recurring Billing D. Revalidation

Last Answer : B. Repossession Explanation: Repossession is a term used to denote a financial institution taking back an object that was either used as collateral or rented or leased.

Description : A type of loan, where the bank or the lending institution provides the borrower with a loan that helps the borrower to pay off his all previous debts is termed as ________ A. Debt Recovery B. Debt Settlement C. Debt Management D. Debt Consolidation

Last Answer : D. Debt Consolidation Explanation: Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others.

Description : A provision in some loans that allows the borrower to change the interest rate from fixed to variable or Vice Versa is termed as __________ A. Convertible Bond B. Convertible Clause C. Convertible Security D. None of the Above

Last Answer : B. Convertible Clause Explanation: A provision that can be found on some bonds allowing the bondholder to exchange their debt into common stock.

Description : A financial instrument is called a ‘primary security’ if it represents the liability of : (1) some ultimate borrower (2) the Government of India (3) a primary cooperative bank (4) a commercial bank

Last Answer : some ultimate borrower

Description : Credit rating _______ A. is used to rate the borrowers while giving advances B. is used to work out performance of the employees C. is used to calculate the number of excellent audit rated branches D. is not used in any bank E. is necessary before giving promotion to employees

Last Answer : A. is used to rate the borrowers while giving advances Explanation: Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. An assessment of the creditworthiness of a borrower with respect to a particular debt or financial obligation.

Description : What is collateral ? -SST 10th

Last Answer : Collateral is an asset which is a property of a borrower of loan such as - land, building, livestock, deposits with bank etc. The borrower uses this 'asset' as a guarantee to the lender (the one who gives money) until the loan is repaid by the borrower.

Description : What do you mean by the term 'collateral' ? -SST 10th

Last Answer : Collateral is an asset which is a property of a borrower of loan such as - land, building, livestock, deposits with bank etc. The borrower uses this 'asset' as a guarantee to the lender (the one ... the loan is repaid by the borrower. NOTE - Collateral is a part of the terms and conditions set by

Description : Give some common examples of collateral used for borrowing. -SST 10th

Last Answer : Property such as land titles, deposits with banks, livestock are some common examples of collateral used for borrowing.

Description : Which of the following is a disaster mitigation strategy? a. Constructing cyclone shelters b. Giving loans from banks c. Providing cheap electricity d. Providing school uniforms to children

Last Answer : a. Constructing cyclone shelters

Description : What do countries use as collateral when borrowing money?

Last Answer : Our credit rating and our reputation is really the collateral. The US borrows money by issuing debt. This means the Government sells Treasury securites like T-bills, notes, bonds et al to other agencies ... interest on these debts and must pay the value when the security is cashed in by the buyer.

Description : Do combantants really use the tactic of having women and children stand behind them to create collateral damage?

Last Answer : All the time. Hezbollah does it as a matter of policy.

Description : Do you have any thoughts on the concept of collateral damage?

Last Answer : Can I have the source where you got this information?

Description : Difference between collateral and bicollateral vascular bundle. -Biology

Last Answer : answer:

Description : Which bank lends without collateral ?

Last Answer : Grameen Bank gives loan without collateral

Description : Is it possible to open a diner with no collateral?

Last Answer : Only banks who offer business loans can answer this or try getting a small business loan through the government. I do not believe they require collateral.

Description : Can your husband use your jointly owned property as collateral?

Last Answer : What is the answer ?

Description : Lateral collateral ligament (LCL) injury?

Last Answer : DefinitionLateral collateral ligament (LCL) injury is a stretch, partial tear, or complete tear of the ligament on the outside of the knee.Alternative NamesLCL injury; Knee injury - lateral ... AidA lateral collateral ligament test may reveal looseness in the ligament. This involves bending t

Description : Medial collateral ligament (MCL) injury of the knee?

Last Answer : DefinitionMedial collateral ligament (MCL) injury is a stretch, partial tear, or complete tear of the ligament on the inside of the knee.Alternative NamesKnee injury - medial collateral ligament (MCL); MCL ... provider will examine your knee. An MCL test will be done to detect looseness of the lig

Description : If I default on my personal loan agreement, can they repossess my collateral?

Last Answer : Your property can be subject to repossession if you default on a loan. This can be the case if you put up part of your collateral as a guarantee for your loan.

Description : Do you do start business loans. I have no collateral and I do not have money invested. Its just me and the idea for the store.?

Last Answer : No you can only get a business loan with something down.

Description : Can I use my car's title as collateral for a car equity loan?

Last Answer : When it comes to using collateral for a car equity loan using your car title is an option through certain loan providers it just depends on their qualifications and the value of your car.

Description : According to this lesson, what term is the way for commanders to adhere to LoW by weighing risk of collateral damage against military necessity and proportionality within the framework of the military decision-making process?

Last Answer : Collateral Damage Estimation Methodology (CDM)

Description : The product of the Collateral Damage Estimation Methodology (CDM) is known as the?

Last Answer : Collateral Damage Estimation (CDE)

Description : STOCK LOAN OFFER: Do you have Stocks of Public Listed Firm Do you want to borrow capital base on Stocks as Collateral?

Last Answer : STOCK LOAN OFFER: Do you have Stocks of Public Listed Firm? Do you want to borrow capital base on Stocks as Collateral? Most of Stocks Investors, especially Owners and/or ... Securities-Backed Financing/Lending Product we offered to Public Listed Companies worldwide. Our Stock Loan’s Lending

Description : If xylem and phloem are arranged in the same radius, such a vascular bundle is called : (1) collateral (2) bicollateral (3) concentric (4) radial

Last Answer : (1) collateral Explanation: In the collateral type of vascular bundle, xylem and phloem are arranged side by side on the same radius. This may be either open or closed. Usually xylem is seen ... the inner side and phloem towards outer side. The collateral vascular bundle is also known as conjoint.

Description : Collateral Security in Business means 1. Additional or Supporting security 2. No security 3. Security in the form of Gold 4. Security for top executives 5. None of these

Last Answer : Additional or Supporting security

Description : A combination of any two or more network topologies are known as: a) Bi-Lateral b) Hybrid c) Collateral d) None of These

Last Answer : b) Hybrid

Description : 5. An IOU of the Federal Reserve Bank of San Francisco to Bank of America is called: a. discounts b. federal funds c. reserves d. collateral

Last Answer : c. reserves

Description : A warranty is a stipulation which is A. Essential to the main purpose of contract of sale. B. Essential for buyer's specific purpose. C. Collateral to the main purpose of contract of sale. D. None of these

Last Answer : C. Collateral to the main purpose of contract of sale.

Description : In case of void agreements, collateral transactions are A. Also void B. Unenforceable C. Not affected D. Illegal

Last Answer : A. Also void

Description : Warranty is a contract means a) collateral to main purpose b)condition to main purpose c) representation to main purpose d)none of the above

Last Answer : a) collateral to main purpose

Description : Repo Market means (a) A money market instrument which helps in collateral short term borrowing and lending through sale and purchase operation in debt instrument (b) A money market ... instrument which helps in collateral short term borrowing through sale and purchase operation in debt instrument

Last Answer : (a) A money market instrument which helps in collateral short term borrowing and lending through sale and purchase operation in debt instrument