Demand Creditor

Right Answer is: CLenders demand any assets of the borrower as a collateral security.

Sometimes creditors require additional collateral to keep a given loan at a constant interest level.Since collateral offers some security to the lender should the borrower fail to pay back the loan, loans that are secured by collateral typically have lower interest rates than unsecured loans.

Obvious forms of collateral include houses, cars, stocks, bonds and cash -- all things that are readily convertible into cash to repay the loan. Some of those assets are "hard," such as houses and automobiles; others are "paper," such as stocks and bonds.

Collateral may take the form of real estate or other kinds of assets, depending on the purpose of the loan. The collateral acts as a form of protection for the lender. That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sell it to recoup some or all of its losses.

The biggest risk of a collateral loan is you could lose the asset if you fail to repay the loan. It's especially risky if you secure the loan with a highly valuable asset, such as your home. It requires you to have a valuable asset.

Collateral Demand means the notice given by the Agent (at the direction or with the concurrence of the Majority Revolving Credit Lenders) to the Borrowers to deliver the items listed in Section 7.15 (a), after the occurrence of a Default or an Event Default.

A secured loan is a loan that has collateral attached to it. This type of loan generally has a lower interest rate because the bank is taking a lower risk because it can collect the collateral if you default on payments. A secured loan is a good way to build credit.

Real estate. The most common type of collateral used by borrowers is real estate. Cash secured loan. Cash is another common type of collateral because it works very simply. Inventory financing. Invoice collateral. Blanket liens.