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Related to collateral: Collateral security


In the context of project financing, additional security pledged to support the project financing.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

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Security for a debt.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
is a provider of risk and collateral management services for the non-cleared derivatives community.
The CEO attempts to cancel the bank guarantee but gets a letter from Mr Hans' lawyers claiming that the CEO and his company are in breach of the agreement and have not fulfilled their obligations to enable the release of the collateral to the bank.Alas, he never really read the document.
There are two strands of theories that explain different effects of collateral on loan risk.
If the debtor or other plan proponent attempts to seek confirmation of a Chapter 11 plan over the objection of an electing undersecured creditor, the plan can be confirmed only if it is "fair and equitable." In most cases, by operation of Section 1129(b) (2)(A)(i), this means that the electing creditor must retain its lien on the collateral and receive deferred cash payments "of a value, as of the effective date of the plan, of at least the value" of the collateral.
In connection with, and taking into consideration Eniro's refinancing through the bond loan issued by Eniro on 25 September 2018, PRI confirmed to Eniro that PRI may be willing to, under certain conditions, give a respite with an increase of the collateral and instead reduce the collateral to SEK182m during a 24-months period, which has resulted in this agreement
Title over repurchase agreement collateral is transferred to the security trustee, The Bank of New York Mellon (BNY; AA-/Stable/F1+) and held on behalf of each noteholder.
The law also requires the establishment of an electronic registry by the Land Registration Authority to reduce the risks involved in banks accepting 'movable' collateral or those that are not in real estate.
In the last two decades, numerous published data have emphasized the importance of the status of collateral circulation in the outcome assessment after AIS [14].
The bill also aims to develop a professional, regulated warehousing industry, which issues receipts that can be used as collateral by lenders and can be traded by investors and industry players.Apart from this, it seeks to establish an automated movable collateral registry wherein information on transfers and pledges of collateral can be accessed by participants, the DOF said.
Subsequently, multivariate regression analysis was performed to determine independent predictors of coronary collateral development.
Collateral, otherwise known as security in a form of asset or property pledged against its loan, is used as a credit support to prove to the financial institution that the company is indeed a viable and reliable borrower.