Tip:
Highlight text to annotate it
X
This is Financial Adviser, Patrick Munro talking about what is secured credit loan collateral.
Basically, when you make a loan, the bank is going to want security on the loan, and
so they'll take collateral, as it's called in the world of borrowing. That is to say
a car, or a house, if you're making a note on the car, they would take the car as collateral,
security. If you're making a mortgage on the house, a loan by way of mortgage, that would
be securitized by the actual asset, which is the home. And, this is important for the
borrower, to have some underlying security for the loan that they have put forward to
you, because more often than not, their a savings institution and they have responsibility
to their depositors to make sure that the money that they have in their institution,
is secured by underlying assets. So, that's the essence of our financial system, and it's
based on loan collateral going forward, This is Financial Planner, Patrick Munro, talking
about what is necessary in the area of loan collateral.