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Collateral is a backup source of repayment, and should not be used to approve a loan by itself. Loans granted on the basis of collateral

Collateral is a backup source of repayment, and should not be used to approve a loan by itself. Loans granted on the basis of collateral are subject to risk that the collateral is overvalued and the bank might not be able to control the collateral or obtain clear title.

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