Question

Select the correct answer.

What is collateral?
A. the money used for a down payment on a loan
OB. the assets used to secure a loan
OC. the closing costs associated with obtaining a loan
OD. the lien filed by the lender

Answer 1

OB. the assets used to secure a loan

Explanation:

You use collateral to decrease the risk for the bank. It can be like a car, or house. If you don't pay them back, they take the car or house.