Perhaps the biggest obstacle when it comes to lending is the issue of collateral. For those with no collateral, loan seeking can be a difficult course. Collateral is essentially some item of value that the loan can be secured against. This is most commonly a home or property, or a vehicle. Essentially, this minimizes the risk posed to the lender, since a lien is placed on the collateral. If the loan ends up defaulting, the loan institution can recover some if not all of their money by putting up the collateral for sale.
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