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Collateral security is a property that borrower offers to lender being security of loan. Collateral security may be primary or secondary.
It is a form of secondary protection sometimes required by a bank and intended to guarantee a debt obligation.
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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