Collateral

/kəˈlæt.ər.əl/

Meaning & Definition

noun

Property or assets that a borrower offers to a lender to secure a loan.

The bank required collateral in the form of real estate before approving the loan.

Something given as security for a loan that may be forfeited in the event of default.

He put up his car as collateral to get the urgent cash he needed.

adjective

Related to or connected with something else; secondary or supplementary.

The company offered collateral benefits to employees aside from their primary salary.

Secondary or accompanying in nature; not a primary risk.

The collateral damage from the explosion affected several nearby buildings.

From Latin collateralis, meaning 'of the side, side by side'.

collateral damage

Unintentional damage inflicted during a military operation.

collateral loan

A loan secured by collateral.

collateral benefits

Additional advantages gained from an action, aside from the main benefit.

security

Something that serves as a pledge for a loan.

pledge

A solemn promise or agreement.

Refers to something extra or additional that's not the main focus.

That extra feature is just collateral, not the main reason to buy the product.

Used informally to describe unintended side effects.

The collateral was just a side effect from the company's expansion.