Why do some lenders require borrowers to secure credit?

to prevent defaults
to guarantee full repayment
to avoid any losses
to reduce risk

Question

Why do some lenders require borrowers to secure credit?

to prevent defaults
to guarantee full repayment
to avoid any losses
to reduce risk

GPT-5 mini · Answer

Correct answer: to reduce risk.

Explanation: requiring collateral (secured credit) lowers the lender’s risk exposure because the lender can seize or sell the collateral if the borrower defaults. It does not guarantee full repayment, prevent all defaults, or eliminate all losses.

Why do some lenders require borrowers to secure credit?

to prevent defaults
to guarantee full repayment
to avoid any losses
to reduce risk

All Answers 1

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Why do some lenders require borrowers to secure credit? to prevent defaults to guarantee full repayment to avoid any losses to reduce risk

All Answers 1