Willingness to post collateral may be a signal of more, rather than less, credit risk on the part of the borrower.

Name: Willingness to post collateral may be a signal of more, rather than less, credit risk on the part of the borrower.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Posting collateral suggests that the borrower may not be able to repay the loan through other means, and therefore has to use their assets as security. This may indicate financial instability and a higher likelihood of default, making them a riskier borrower.

Willingness to Post Collateral May Be a Signal of More