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What is collateral security?

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Question added by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice
Date Posted: 2014/01/14
NAVED-UL-HASSAN KHAN NAGHAR
by NAVED-UL-HASSAN KHAN NAGHAR , Sr. Manager , Parker Randall A. J. S Chartered Accountants

Collateral security is a property that borrower offers to lender being security of loan. Collateral security may be primary or secondary.

mohamed sabeen
by mohamed sabeen , QHSE Manager , Novus catering service

Collateral is usually something that the bank or person you want to barrow money from can get just in case you couldn't pay them back what you owe. It doesn't have to be worth the money you owe.

Abdul Aziz
by Abdul Aziz , Specialist, Metrics and Systems Support (Procurement) , KBR Inc.

It is a form of secondary protection sometimes required by a bank and intended to guarantee a debt obligation.

Vinod Jetley
by Vinod Jetley , Assistant General Manager , State Bank of India

Specific asset (such as land or building) pledged as a secondary (and subordinate) security by a borrower or guarantor. The principal security is usually the borrower's personal guaranty, or the cash flow of a business. Except for highly creditworthy customers (who can get loans against only their signatures)

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