1. In a secured loan, what typically sorves as collaharan? 1. The house of car being purchased 2. The borrower's credit score 3. Tha lender's reputation 4. The interest rate

The correct answer is **1. The house or car being purchased.**<br /><br />Collateral is an asset that a borrower pledges to a lender as security for a loan. If the borrower defaults on the loan (fails to repay), the lender can seize the collateral and sell it to recoup their losses. In secured loans like mortgages (for houses) and auto loans (for cars), the purchased item itself usually serves as the collateral.<br />