Collateral
/kəˈlætərəl/
Definitions
- (n.) Property pledged by a borrower to secure a loan and subject to seizure on default.
The bank took the house as collateral for the mortgage.
- (adj.) Serving as security or subordinate in relation to the main subject, often secondary or additional.
They provided collateral documents to support the primary agreement.
Related terms
See also
Commentary
In drafting, specify clearly what constitutes collateral to avoid ambiguity in secured transactions.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.