Question
Download Solution PDFWith which of the following functions of a bank would you associate the term ‘collateral’?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Granting of loans and Services.
Key Points
- Collateral
- The term collateral refers to an asset that a lender accepts as security for a loan.
- Collateral may take the form of real estate or other kinds of assets, depending on the purpose of the loan. Hence, Option 4 is correct.
- The collateral acts as a form of protection for the lender.
- That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sell it to recoup some or all of its losses.
- Collateral is an item of value used to secure a loan.
- Collateral minimizes the risk for lenders.
- Mortgages and car loans are two types of collateralized loans.
- Other personal assets, such as a savings or investment account, can be used to secure a collateralized personal loan.
Last updated on Jun 26, 2025
-> SSC MTS 2025 Notification has been released by the Staff Selection Commission (SSC) on the official website on 26th June, 2025.
-> A total of 1075 Vacancies have been announced for the post of MTS and Havaldar in CBIC and CBN.
-> The last date to apply online will be 25th July 2025 as per the SSC Exam Calendar 2025-26.
-> The selection of the candidates for the post of SSC MTS is based on Computer Based Examination.
-> Candidates with basic eligibility criteria of the 10th class were eligible to appear for the examination.
-> Candidates must attempt the SSC MTS Mock tests and SSC MTS Previous year papers for preparation.