Question 19 • S25 Introduction to Business A (Theisen)
Collateral is an asset pledged to the lender that can help repay the loan if you do not. Because it reduces the lender’s risk, offering collateral can help you qualify for a lower interest rate. A low credit score, a history of defaulting, and using all your available credit generally make you seem riskier to lenders.
AI-written and checked against the verified answer.