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

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

From Salon ● Aug. 28, 2026

“These and other harms are not collateral to the antitrust case,” LULAC’s letter said.

From Los Angeles Times ● Aug. 24, 2026

Two things will tell you whether this hardware can become collateral.

From MarketWatch ● Aug. 20, 2026

“This weapon might help minimize corruption but with collateral damage,” John F. Hulpke, a professor at University College Dublin, wrote in the Journal of Management Inquiry in 2017.

From Salon ● Aug. 19, 2026

His biggest positions were with Goldman, and Goldman was newly unable, or unwilling, to determine the value of those positions, and so could not say how much collateral should be shifted back and forth.

From "The Big Short" by Michael Lewis

"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

He sold provisions and clothing to those who could pay; equally, he sold on credit, to those who could not, without references, without collaterals.

From Dr. John McLoughlin, the Father of Oregon by Frederick Van Voorhies Holman

Related Words

• ancillary