Credit rationing can happen even when demand and supply are balanced in a loan market. This means some people who could pay higher interest rates are denied loans, or certain groups can't get loans at any rate. Banks may choose to deny loans instead of raising interest rates when there is high demand for credit. Collateral and interest rates play a role in how loans are given out, but increasing collateral may not always help. Even with different payment schedules and contracts, credit rationing can still occur. This shows that the law of supply and demand doesn't always apply in the world of loans.