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July 12, 2005

Collateral - what it is in terms of loan specifics

Collateral is nothing more than something of a value that secures a loan.
Collateral loan can be a mortgage, a car loan or a little cash from a neighborhood pawn shop.
A house, a car and say a piece of jewelry are respective collaterals.

As you can see that while this type of collateral loan is not as exciting as the recent Tom Cruise movie, it serves as quite a backbone of our economy.

And if you default on payments few times too many, you collateral will be taken from you. That is called repossession.

So be careful how you treat you collateral loan.

From the standpoint of real estate investing, collateral has a bit different and more positive meaning.

Will review it later ...

Posted in Credit Repair at July 12, 2005 09:27 PM

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