If you default on your auto loan,your car will be repossessed because it has been pledged as ________ for the loan.
A)interest
B)collateral
C)dividend
D)commodity

Question

Quizplus · Accepted Answer

Collateral refers to the property or asset that has been pledged as security for a loan. In the case of an auto loan, the car serves as collateral. If the borrower defaults on the loan, the lender has the right to repossess the car in order to recover their funds. A, C, and D are not correct choices as they do not accurately describe the concept of collateral.

If You Default on Your Auto Loan,your Car Will Be