Credit that requires collateral that protects payment of the loan is referred to as ________.

Question

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Secured credit refers to credit that requires collateral to protect the loan. This means that the lender has the right to take possession of the collateral if the borrower fails to make payments. Unsecured credit, on the other hand, does not require collateral and is based on the borrower's creditworthiness. Equal credit and fair credit are not relevant to this question.

Credit That Requires Collateral That Protects Payment of the Loan