Question: How is collateral used in evaluating loans? Multiple choice question. Collateral is used when you apply for a credit card and the company needs payment,

How is collateral used in evaluating loans?
Multiple choice question.
Collateral is used when you apply for a credit card and the company needs payment, so they take your home and sell it for payment.
Collateral is used when you apply and sign for a loan, pledging some kind of property to secure the loan.
Collateral is using one item to pay for another item.

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