Meaning & Definition of word "Collateral"

Collateral

/kəˈlæt.ər.əl/

1. Property or assets that a borrower offers to a lender to secure a loan.
- Example: The bank required collateral in the form of real estate before approving the loan.
2. Something given as security for a loan that may be forfeited in the event of default.
- Example: He put up his car as collateral to get the urgent cash he needed.

1. Related to or connected with something else; secondary or supplementary.
- Example: The company offered collateral benefits to employees aside from their primary salary.
2. Secondary or accompanying in nature; not a primary risk.
- Example: 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.

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

● Example Sentence: That extra feature is just collateral, not the main reason to buy the product.

Meaning: Used informally to describe unintended side effects.

● Example Sentence: The collateral was just a side effect from the company's expansion.