Assets with monetary value, such as stocks, bonds, or real estate, that 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, becomes 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.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). collateral. Retrieved September 22, 2026, from http://smartdefine.org/collateral/definitions/1150147 |
| Chicago | Barry Goldsmith. 2010. "collateral" http://smartdefine.org/collateral/definitions/1150147 (accessed September 22, 2026). |
| Harvard | Barry Goldsmith 2010, collateral, Smart Define, viewed 22 September, 2026, <http://smartdefine.org/collateral/definitions/1150147>. |
| MLA | Barry Goldsmith. "collateral" 21 October 2010. Web. 22 September 2026. <http://smartdefine.org/collateral/definitions/1150147> |