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

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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

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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

Firms can then borrow money using those contracts – plus the AI chips they purchase – as collateral, explained analyst Cory Johnson of "The Quiet Period" IPO research outfit.

From BBC ● Nov. 1, 2026

If AI proves to be a bubble – and bursts – neocloud firms "are definitely going to face collateral damage," said Bradley Tusk of Tusk Ventures.

From BBC ● Nov. 1, 2026

A sharp selloff in equities through Friday has “created collateral damage in the precious-metals markets due to a liquidity-driven flight to safety,” said Dana Samuelson, president of American Gold Exchange.

From MarketWatch ● Oct. 30, 2026

Increasingly, small businesses like Brushstrokes + Beverages — with little capital to use as collateral against a traditional loan — are turning to nonbank finance companies for merchant cash advances.

From Los Angeles Times ● Oct. 28, 2026

I piled up courses on constitutional law, litigation, appellate procedure, federal courts, and collateral remedies.

From "Just Mercy" by Bryan Stevenson

Evergrande's offshore debt restructuring involves a total of $31.7 billion, which include bonds, collaterals and repurchase obligations.

From Reuters ● Aug. 18, 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 stocks and bonds, based simply upon ideas, became worthless, the collaterals became dust and ashes.

From The Works of Robert G. Ingersoll, Vol. 8 (of 12) Dresden Edition?Political by Robert Green Ingersoll

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Related Words

• ancillary

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