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DonCredo
2 years ago

If a bank grants a loan, it must take precautions in case the borrower does not pay the money back. So you’re looking for values in about the credit level that you can make as an alternative to money… this is then contractually defined.

This may be pledged credits, collateral transfers or also basic debts. It’s called credit security. All right?

Gruss

DonCredo
2 years ago
Reply to  foxishere123

In my knowledge, it is not because this is still considered highly speculative … which speaks to the concept of safety.🤷

Mediachaos
2 years ago

You want a loan. The lender (e.g. bank) wants a security that you can pay for it. For example, a house can have a so-called. Basic debt in favour of the bank.

This means that if you can no longer make your real estate loan, the bank has access to the property or the whole house. This is the security for the bank’s credit.

Dorfkind63
2 years ago

you want a loan for a car, and give the bank the KFZ letter (or whatever it is today)

If you don’t pay the rates back, the bank silveres the security (the car) to get their rates more or less complete.