Question

What is default? Money put down by the borrower Failure to fulfill a financial obligation Physical property to secure a loan Eligibility for receiving any credit

Answer 1

The correct answer is:

"Physical property to secure a loan."

In financial terms, the term "collateral" refers to physical property or assets that a borrower offers as security to the lender in order to obtain a loan or credit. If the borrower fails to fulfill their financial obligations, the lender can take ownership of the collateral as a means of recovering the value of the loan. This provides a form of security for the lender in case the borrower defaults on their loan payments.

Answer 2

Default in financing refers to a borrower's failure to fulfill a financial obligation, such as repaying a loan. This can result in legal action and the seizure of physical property used as collateral.

Step-by-step explanation:

In the context of financing, the term 'default' refers to the failure of a borrower to fulfill a financial obligation, such as repaying a loan.

For example, if a borrower fails to make their loan payments on time or does not repay the loan in full, they are considered to be in default.

In such cases, the lender may take legal action to recover their funds, potentially seizing and selling the borrower's physical property that was used as collateral for the loan.