(Answered) I think that using the collateral gives the lendor

Finance

I think that using the collateral gives the lendor something tangible to fall back on. Its like when people take out loans for cars or homes and the item they take the loan out for is the collateral...so if they default, basically the property goes back into the hands of the lender and can be resold to another. Do you think that the collateral takes away some of the usual risk?

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