andrewbranhamduff
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Homer wants to borrow money from the Springfield Bank to buy a new trampoline. The bank requires collateral for a loan. What is collateral?
A) a signed statement that the loan will be repaid
B) an increased interest rate for a high risk loan
C) something of value which the bank will receive if the loan is not repaid
D) money deposited in the bank which is greater than the amount of the loan

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natahernandez80

Answer:

C) something of value which the bank will receive if the loan is not repaid

Explanation:

Homer should provide something of value that the bank will receive if the loan is not repaid. Thus, Option C is the correct statement.

What do you mean by collateral in a loan?

Collateral is actually an asset, including a vehicle or home, that a borrower offers as a way to qualify for a specific mortgage.

Collateral could make a lender greater cushy extending the mortgage because it protects their economic stake in case the borrower, in the long run, fails to pay off the mortgage in full.

Thus, Option C is the correct statement.

learn more about Collateral here:

https://brainly.com/question/14997152

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