collateral

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Collateral

In the context of project financing, additional security pledged to support the project financing.

collateral

Assets pledged as security for a loan. In the event that a borrower defaults on the terms of a loan, the collateral may be sold, with the proceeds used to satisfy any remaining obligations. High-quality collateral reduces risk to the lender and results in a lower rate of interest on the loan.

Collateral.

Assets with monetary value, such as stock, bonds, or real estate, which are used to guarantee a loan, are considered collateral.

If the borrower defaults and fails to fulfill the terms of the loan agreement, the collateral, or some portion of it, may become the property of the lender.

For example, if you borrow money to buy a car, the car is the collateral. If you default, the lender can repossess the car and sell it to recover the amount you borrowed.

Loans guaranteed by collateral are also known as secured loans.

collateral

Security for a debt.

References in periodicals archive ?
In patients who have undergone previous head and neck cancer resections, collateral blood supply to the tongue might develop if the flow of one or both of the lingual arteries is interrupted.
The centerpiece of good collaterals is the information brochure.
An axon may grow steadily toward one main target, but secondary axons, or collaterals, can shoot off from the axon's main trunk.