What do you call an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender?

Collateral

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Interest

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Reserve

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Deposit

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Solution

The correct option is A Collateral
When banks lend money to borrowers, the loan is dispersed against an asset. The asset that a borrower owns and uses as a guarantee until a loan is repaid to a lender is known as collateral.

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