John buys a new car with the help of a loan. He permits the creditor to take possession of the car if he cannot repay the loan in time. Here, the car is the .

collateral

Explanation:

Collateral is asset  which borrower give to lender as security to extend the loan.  It is type of grantee which borrower or buyer give to lender or seller to make sure that payment will be paid  on time. If any case borrower may get default then lender has authority to sell that asset and fulfill portion of his loss.

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