Why do some lenders require borrowers to secure credit

The later schools question and answer asked over students to claim what they ponder is the main important concern for a student to do in order for you to attain success. One which response stood out from the rest was practice. Successful persons absolutely not born successful; they become successful via hard work and commitment. This is how you can obtain your goals. shown below some question and answer examples that you could possibly utilize to enrich your knowledge and gain insight that will help you to sustain your school studies.


Why do some lenders require borrowers to secure credit


Complete Question:

Why do some lenders require borrowers to secure credit?

A. To prevent defaults

B. To guarantee full repayment

C. To avoid any losses

D. To reduce risk


Option D. To reduce risk


The reason is that the lender faces the credit risk which is the risk of the loss of the repayment in whole or in parts and the risk of default of the interest payments by the borrower.

So if we see the options, the option A, B and C are basically the credit risk that the lender is facing so the only option that is more general (not specific as the option A, B and C) and includes these three options is option D.

So the option D is correct.

They could hopefully assist the student solve the question by using the questions and answer examples. Then can certainly make some sharing in a group discussion and also study with the classmate relating to the topic, so another student also gain some enlightenment and still keeps up the school learning.

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