question_answer

List some items which are kept as collateral security against loans. What happens if a borrower fails to repay the loan?

Answer:

Collateral refers to use of assets by the borrower as a guarantee to a lender until the loan is repaid. Examples of items used; as collateral security-land titles, deposits with banks, livestock, etc.

The lender has the right to sell the asset or collateral to obtain payment in case borrower fails to repay the loan.