Collateral


Collateral
Properties or assets that are offered to secure a loan or other credit. Collateral becomes subject to seizure on default.

Collateral is a form of security to the lender in case the borrower fails to pay back the loan.

For example, if you get a mortgage, your collateral would be your house. In margin trading, the securities in your account act as collateral in the case of a margin call.


Investment dictionary. . 2012.

Synonyms:


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