loans
collateral
An asset pledged as security for a loan, which the lender can seize if the borrower fails to repay.
Example
"He used his car as collateral for the personal loan."
💡 Memory Tip
CO-lateral — think of it as a co-signer that's an object. It stands beside the loan as a guarantee.
Etymology
From Latin 'collateralis' meaning 'side by side' — an asset placed alongside the loan as security.
Common Misspellings
colateralcollataralcollatteralcolatteral
Related Terms
See Also
security