Which among the following terms is used for property or other items that are pledged to pay off a loan if payments are not made according to the contract?
Which among the following terms is used for property or other items that are pledged to pay off a loan if payments are not made according to the contract?
[A]Annuity
[B]Collateral
[C]Commodate
[D]Lease
Collateral
Collateral is an asset pledged to a lender to guarantee repayment. Collateral could include savings, bonds, insurance policies, jewellery, property or other items that are pledged to pay off a loan if payments are not made according to the contract. Collateral is not required for unsecured credit card accounts.
Originally written on
May 18, 2015
and last modified on
May 18, 2015.