0. 2. Why do lenders ask for collateral while lending?

1.	0. 2. Why do lenders ask for collateral while lending?
Answer» If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment. Reduction of exposure in order to do more business with each other when credit limits are under pressure. Possibility to achieve regulatory capital savings by transferring or pledging eligible assets. why do lenders ask for collateral while lending

Answer»

If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.

Reduction of exposure in order to do more business with each other when credit limits are under pressure.

Possibility to achieve regulatory capital savings by transferring or pledging eligible assets.

why do lenders ask for collateral while lending

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