Quick Definition

Collateral refers to assets that a borrower offers to a lender to secure a loan, which the lender can seize if the borrower fails to repay the loan.

Examples

• 1A house used as collateral for a mortgage loan.
• 2A car used as collateral for an auto loan.
• 3Stocks or bonds used as collateral for a personal loan.
• 4Business equipment used as collateral for a business loan.

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