It is possible that there are interactions between several characteristics of loans in determining the PD. To know that the loan is backed by collateral provides information about the quality of the borrower at the time of the decision, depending upon the information asymmetry between the borrower and the lender [Boot et al. (1991)], and/or it provides information about the possible trade-off between the use of collateral and time invested in evaluating the risk of the operation for the lender [Manove and Padilla (1999 and 2001)]. It can be expected that lenders will offer a choice between.