The guarantee given to the lender, until the loan is repaid is called _____.

Savings

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Bills of exchange

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Deposits

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Collateral

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is C Collateral
Collateral is a type of a security taken by the banks from its customers.
Usually collateral is taken by the banks for lending money to its customers.
Collateral can be in the form of fixed deposit, property documents, etc.

Suggest Corrections

Similar questions

Fill in the blanks:

(i) Majority of the credit needs of the __________households are met from informal sources.

(ii) __________costs of borrowing increase the debt-burden.

(iii) __________issues currency notes on behalf of the Central Government.

(iv) Banks charge a higher interest rate on loans than what they offer on __________.

(v) __________is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.

Join BYJU'S Learning Program