Is collateral used for repaying the loan?
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virge
Apprentice
Joined: 25 Apr 2007
Posts: 4
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 Posted: 01/26/09 - 06:59 Post subject: |
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| My friend is experiencing serious money problems. He was force to take a loan in his bank. I have no idea that this was happening to him. He mentioned to me couple of nights ago at a dinner party. There are some things in his story that I did not fully understood but I did not want to ask too many questions. Is collateral used for repaying the loan? |
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bronny
Apprentice
Joined: 03 May 2007
Posts: 6
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| Posted: 02/10/09 - 03:48 Post subject: |
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| Hello, I think that it is a smart move that you did not ask too many questions. If I were in your friend’s position I would not like to explain it to other people. It is better to leave him, since you obviously cannot help him. I would not say that collateral is used for repaying the loan. I would say that it is used to secure the loan. |
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brit
Apprentice
Joined: 01 Jun 2006
Posts: 3
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| Posted: 02/25/09 - 00:36 Post subject: |
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| Collateral can be used for repaying the loan if the person who pledges the collateral in the first place was unable to pay the loan back. So in this situation the lender will be able to get his money. Otherwise it is being used to secure the loan. There are many forms of collateral loans. |
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