noun
Uncommon
collateral
kuh-LA-tuh-ruhl
Collateral (noun) means an asset pledged as security for a loan, which the lender can claim if the borrower fails to repay. Example: “He put up his car as collateral for the loan.”
noun
1
An asset pledged as security for a loan, which the lender can claim if the borrower fails to repay.
"He put up his car as collateral for the loan."
"The bank required collateral before approving the mortgage."
"Small businesses often struggle to offer enough collateral when they ask for a loan."
adj
1
Secondary or incidental, alongside the main effect or target.
"The report focused on collateral damage from the policy change."
How to use collateral
Learner’s notesIn plain EnglishUsually a financial term for property put up as a guarantee on a loan; also used for side effects that come alongside a main action.
Common pairings
put up collateral
collateral damage
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Word forms
- Plural
- collaterals
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He put up his car as _____ for the loan.
Etymology
From Medieval Latin collateralis, from Latin col- ("together with") and latus ("side") — literally "at the side".
Synonyms
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Related words
Rhymes for collateral
See all rhymes for collateral →Frequently asked questions
What does “collateral” mean?
The word “collateral” means an asset pledged as security for a loan, which the lender can claim if the borrower fails to repay. In plain terms, usually a financial term for property put up as a guarantee on a loan; also used for side effects that come alongside a main action.
How do you pronounce “collateral”?
“Collateral” is pronounced kuh-LA-tuh-ruhl (/kəˈlætəɹəl/ in IPA).
How do you use “collateral” in a sentence?
Here is “collateral” used in a sentence: “He put up his car as collateral for the loan.”
What part of speech is “collateral”?
Depending on how it is used, “collateral” can be a noun and an adjective.
Where does the word “collateral” come from?
The word “collateral” comes from Medieval Latin. From Medieval Latin collateralis, from Latin col- ("together with") and latus ("side") — literally "at the side".
Is “collateral” a common word?
“Collateral” is an uncommon word in modern English.
How many meanings does “collateral” have?
“Collateral” has 2 distinct senses listed in this dictionary. The most common is: an asset pledged as security for a loan, which the lender can claim if the borrower fails to repay.
What is the difference between 'collateral' and 'security' in a loan?
'Collateral' and 'security' are often used interchangeably to describe an asset pledged against a loan, which the lender can claim if the borrower fails to repay. 'Collateral' is the more common everyday term, while 'security' is a broader legal term for the arrangement.
What kinds of assets can be used as collateral?
Collateral can be any asset pledged as security for a loan, such as property, vehicles, or savings, which the lender is entitled to claim if the borrower defaults. The value of the collateral typically needs to match or exceed the loan amount.
