Kendy
Verified member
Prior to this time, getting loans was actually a hard nut to crack. Loans gotten from banks are coupled with a lot of paperwork, demands fro a guarantor and collateral. The brain behind a collateral is incase the debtor fails to repay the loan, the collateral must be worth or equivalent to the amount the bank is loaning out to an individual. These days, it is quite easier to get loans from online loan apps without a collateral or guatantors but this method could be risky because all your personal and bank details including your ATM pin would be demanded before you can have access to the loan.
Collateral is almost like an old means of trade by barter, you would lease an asset to the financial institution and until you repay the loan, the asset would be released fully to the loan collector. There are some cases where the collateral is forfeited permanently due to the inability of the debtor to pay. Now, I have seen people use inherited properties or assets which they did not work for but it was willed either by their parents or acquaintance, is it really fair to use such assets as a collateral or otherwise?
Collateral is almost like an old means of trade by barter, you would lease an asset to the financial institution and until you repay the loan, the asset would be released fully to the loan collector. There are some cases where the collateral is forfeited permanently due to the inability of the debtor to pay. Now, I have seen people use inherited properties or assets which they did not work for but it was willed either by their parents or acquaintance, is it really fair to use such assets as a collateral or otherwise?