To offer an
asset as a surety that a
debt will be
repaid. The asset may be kept by the
lender until the debt is repaid, or the
borrower may maintain possession with the proviso that the lender may take possession of the borrower
defaults. For example, one collateralizes a
mortgage loan with the
real estate one purchases with the loan. If the loan is not repaid, the
lender has the right to seize the real estate in question. See also:
Lien.