In an effort to reduce the risk of lending money,banks require that some borrowers pledge certain types of assets as collateral.

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Banks typically require collateral in order to reduce their risk when lending money, as it provides them with some form of security in the event that the borrower is unable to repay the loan. Common types of collateral include real estate, vehicles, and valuable personal property.

In an Effort to Reduce the Risk of Lending Money,banks