collateral

American  

[kuh-lat-er-uhl] / kəˈlæt ər əl /

noun

• collaterals
  plural

1. 

   Finance. property or other assets pledged by a borrower as security for the repayment of a loan.

   He gave the bank stocks and bonds as collateral for the money he borrowed.

2. Anatomy.

   1. a subordinate or accessory part.

   2. a side branch, as of a blood vessel or nerve.

   3. collateral circulation.

3. a relative descended from the same stock, but in a different line.

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adjective

1. accompanying; auxiliary.

   He received a scholarship and collateral aid.

2. additional; confirming.

   collateral evidence;

   collateral security.

3. secured by collateral.

   a collateral loan.

4. aside from the main subject, course, etc.; secondary.

   These accomplishments are merely collateral to his primary goal.

5. descended from the same stock, but in a different line; not lineal.

   A cousin is a collateral relative.

6. pertaining to those so descended.

7. situated at the side.

   a collateral wing of a house.

8. situated or running side by side; parallel.

   collateral ridges of mountains.

9. Botany. standing side by side.

collateral British  

/ kɒˈlætərəl, kə- /

noun

1. 1. security pledged for the repayment of a loan

   2. ( as modifier )

      a collateral loan

2. a person, animal, or plant descended from the same ancestor as another but through a different line

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adjective

1. situated or running side by side

2. descended from a common ancestor but through different lines

3. serving to support or corroborate

4. aside from the main issue

5. uniting in tendency

collateral Cultural  

1. Property or its equivalent that a debtor deposits with a creditor to guarantee repayment of a debt.

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Usage

What does collateral mean in loans? Collateral is an asset, such as a home or a car, pledged by a borrower that a lender accepts as security against a loan in case the borrower for any reason cannot pay back the loan. If a borrower fails to pay back a loan, the lender can seize the collateral and sell it in order to recover the loan amount.

Other Word Forms

Derived Forms

• collaterality
  noun
• collateralness
  noun
• collaterally
  adverb

Inflected Forms

Nouns

• collaterals
  plural

Etymology

Origin of collateral

First recorded in 1350–1400; Middle English, from Medieval Latin collaterālis, equivalent to col- a variant of com- + Latin laterālis “on the side of the body”; see col- ¹ lateral

Explanation

It's what you promise to give someone if you don't repay a loan, like the car you put up as collateral when you take a loan out from the bank. As an adjective, collateral can refer to something indirect or off to the side, like collateral damage. Collateral is the watch you put on the table in a poker game, or the shoes you trade in at the bowling alley. If you pay back your debts, you get your goods back. As an adjective, collateral describes something indirect, like collateral damage (non-soldiers inadvertently killed in war) or collateral relatives such as your second-cousin-once-removed that your mother keeps bugging you to call.

Example Sentences

See Examples For:

collateral collaterals

Hamilton studied how Britain built a permanent bond market and realized it acted as financial-wonder fuel rather than a weakness, since those bonds could be used as collateral when hard currency was scarce.

From MarketWatch ● Sep. 29, 2026

I know what it is like to be collateral damage.

From The Wall Street Journal ● Sep. 22, 2026

"We are making the argument that 'let's avoid collateral damage'."

From BBC ● Sep. 22, 2026

I can’t count myself in their company, knowing that the collateral damage would likely be massive.

From Salon ● Aug. 28, 2026

He borrowed $311 from the Bank of America, using his car as collateral for the loan, and persuaded his wife to give him $15 in cash from her purse.

From "Fast Food Nation: The Dark Side of the All-American Meal" by Eric Schlosser

"We hold collaterals, which will help us realize value even if Evergrande is liquidated," said a Class C creditor, who expected a better recovery rate for his debt than the bondholders.

From Reuters ● Oct. 31, 2023

Fortunately, our bodies are well protected against this kind of loss and can quickly grow new vessels, called collaterals, that carry blood around the bypass to the starving tissues beyond.

From New York Times ● Nov. 4, 2016

For the most part, the parents, grandparents, and collaterals are persons strongly preoccupied with abstractions of a scientific, literary, or artistic nature, and limited in genuine interest in people.”

From Slate ● May 1, 2013

The audience’s own knee ligaments screamed in sympathy — medial collaterals fraying like hemp rope.

From Washington Post ● Aug. 5, 2012

The axon n runs toward the center, giving off in its course several collaterals.

From Psychotherapy by James J. (James Joseph) Walsh

Related Words

• ancillary