Question

why does a lender ask for a collateral to determine whether a person should receive a loan?○ if a person has no collateral, the lender knows it will be easier for the person to repay a loan.○ if a person has assets, the person will have monthly expenses to pay for these assets.○ if a person has a lot of collateral, the lender feels secure that there is something to support the loan.○ if a person has no assets, the lender will feel assured that a loan will be the first expense paid.

Explanation:

Collateral is an asset a borrower pledges to a lender as security for a loan. If the borrower fails to repay the loan, the lender can seize the collateral to recover their losses. This reduces the lender's risk, so having sufficient collateral makes the lender feel secure about the loan. The other options are incorrect: lack of collateral does not make repayment easier, asset ownership's monthly expenses are not relevant to lender security, and no assets do not assure the lender the loan will be prioritized.

Answer:

If a person has a lot of collateral, the lender feels secure that there is something to support the loan.