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Collateral is often required when the lender wants some assurance that they won’t lose all of their money. If you pledge an asset as collateral, your lender has the right to take action (assuming you stop making payments on the loan): they take possession of the collateral, sell it, and use the sales proceeds to pay off the loan.
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Re Amortized Loan Re Amortize Your Loan And once you’re operating from a place of logic and knowledge rather than fear, you’re in a better position to strategize the best way to put student loan amortization – and student loan debt as a whole – behind you, once and for [email protected] Dee: I have student loans through wells Fargo, and used to pay quite a bit more than what was owed every month. After about 6 months of doing that, I noticed my payments got a bit smaller. I called to ask about it and was told my loan was re-amortized due to my extra payments. They didn’t call it "recasting" but it sounds like the same.