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| What does Collateral mean?
Collateral stands for any goods, real estate or land which is put up as guarantee for a loan. This means that the borrower isn't paying his debt off then this collateral is seized and auction off to cover the loan.
If your taking out a loan in most cases you have to put up something as collateral to cover, only exceptions are for highly trusted customer where their signatures alone are enough. After you've received the loan and your in the situation that you can't pay then they will take the collateral to sell it or auction off so the lender will recover it's lose. | | | | |
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