Sunita took a loan with her house as the collateral. When will the house be free from the bond?

After the repayment of the loan

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After the completion of education

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She will never get back the ownership of the collateral

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She will get the ownership whenever she desires

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Solution

The correct option is A After the repayment of the loan
Whenever banks give loans, they collect collaterals from borrowers. A collateral could be any asset that is pledged as a security to the lender. If the borrower fails to repay the loan, he/she loses the collateral to the lender. Thus, Sunita's house would be free from the bond only after she repays the loan entirely.

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