collateral

play

adjective col·lat·er·al \ kə-ˈla-t(ə-)rəl \

Updated on: 26 Jul 2017

Definition of collateral

1 a :accompanying as secondary or subordinate :concomitant

digress into collateral matters

b :indirect

no direct objection, but a few collateral ones

c :serving to support or reinforce :ancillary

collateral evidence was presented at the trial

2 :belonging to the same ancestral stock but not in a direct line of descent — compare lineal 3a

Brothers, cousins, uncles, and nephews are collateral kinsmen.

3 :parallel, coordinate, or corresponding in position, order, time, or significance

collateral states like Athens and Sparta

4 a :of, relating to, or being collateral used as security (as for payment of a debt or performance of a contract)

b :secured by collateral

a collateral loan secured by stocks and bonds deposited with the lender

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collaterality

play \kə-ˌla-tə-ˈra-lə-tē\ noun

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collaterally

play \kə-ˈla-t(ə-)rə-lē\ adverb

See collateral defined for English-language learners

See collateral defined for kids

Examples of collateral in a Sentence

the collateral effects of the government's policies

Recent Examples of collateral from the Web

Heroes and enemies wield short or long range weapons, each with collateral effects that can burn, blind, freeze and even knock combatants off the board.

— matt peckham, Time, "Mario + Rabbids Kingdom Battle," 28 Aug. 2017
Bloomberg View Columnist Mohamed El-Erian discusses the likelihood of a U.S. government shutdown and possible collateral damage from heated rhetoric.

— Bloomberg.com, "El-Erian Says U.S. Will Avoid Government Shutdown," 25 Aug. 2017
The bank's efforts to move beyond the tumult is being hamstrung by the collateral damage from its mistakes: Fixing the damaged credit scores of potentially millions of customers.

— renae merle, chicagotribune.com, "Wells Fargo's scandal damaged their credit scores. What does bank owe them?," 18 Aug. 2017
Gabriel Paulista is currently out with a medial collateral knee ligament injury, meaning Kolasinac and Monreal could both line up in a back three alongside Rob Holding when the Foxes travel to the Emirates next week.

— SI.com, "VIDEO: Per Mertesacker Subbed After Getting Absolutely Battered by Gary Cahill's Elbow," 6 Aug. 2017
For all the scope of its story, Game of Thrones is centered almost exclusively on the highborn families who struggle for power, with relatively little time for the smallfolk who end up as collateral damage.

— scott meslow, GQ, "Game of Thrones Season 7 Premiere Recap: The Wolf and the Sheep," 17 July 2017
In a new twist, for $150, businesses can purchase a Table Spotlight package to design a centerpiece that promotes their company and to place collateral materials at each place setting.

— faye reeder, star-telegram, "Southlake Women’s Club awards $185,000 in grants from Art in the Square earnings," 15 July 2017
Whether they were executed hostages or collateral damage, many of the dead are civilian.

— andrew doran, National Review, "Bulletin from Mosul — the Mission Is Still Far from Accomplished," 14 July 2017
Her death was meaningless and tragic—collateral damage that went largely ignored.

— matt miller, Esquire, "Finally, Justice For Barb...From the Emmys," 13 July 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'collateral.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Did You Know?

If an official talking about some policy refers to a collateral issue, he or she means something that may be affected but isn't central to the discussion. To an anthropologist, your cousin would be called a collateral relative, since he or she (unlike your grandmother, brother, or daughter) is "off to the side" of your direct line of descent. As a noun, collateral means something provided to a lender as a guarantee of repayment. So if you take out a loan or mortgage to buy a car or house, the loan agreement usually states that the car or house is collateral that goes to the lender if the sum isn't paid.

Origin and Etymology of collateral

Middle English, from Anglo-French, from Medieval Latin collateralis, from Latin com- + lateralis lateral

NEW! Time Traveler

First Known Use: 14th century

See Words from the same year

Other Anthropology Terms

ectomorph, ethnography, prehistory, yurt

collateral

noun

Definition of collateral

1 :a collateral relative

A collateral inherited the estate.

2 :property (such as securities) pledged by a borrower to protect the interests of the lender

3 :a branch of a bodily part (such as a vein)

See collateral defined for English-language learners

Recent Examples of collateral from the Web

Later in the game, a low hit tore 85 percent of his medial collateral ligament off the bone of his left knee, famously sending coach Jim McElwain running onto the field in a rage.

— edgar thompson, OrlandoSentinel.com, "Forgotten Luke Del Rio working to be factor in Gators’ starting QB race," 5 Aug. 2017
Davidson donned the brace after spraining his ulnar collateral ligament during spring practices.

— tom green, AL.com, "Auburn's Marlon Davidson will play 2017 season with elbow brace," 2 Aug. 2017
Western policymakers have allowed the Christians of Iraq to be the acceptable collateral damage at every stage along the way for the past 20 years.

— thomas s. hibbs, National Review, "Facing Extinction, Iraqi Christians Look to America," 28 July 2017
On Monday afternoon, the team announced that shortstop Gleyber Torres will miss the rest of the 2017 season due to a torn ulnar collateral ligament in his left elbow.

— jon tayler, SI.com, "Top Yankees prospect Gleyber Torres to have Tommy John surgery, out for year," 19 June 2017
Rarely can this type of interaction occur without collateral damage.

— corey mueller, chicagotribune.com, "How to deal with your ex's flirtatious friend," 7 June 2017
This kind of enabling behavior defines the Republican Party today, and is often and correctly interpreted as part of the endless collateral damage Republicans will tolerate in pursuit of tax cuts.

— brian beutler, New Republic, "How Republicans Are Helping Trump Destroy the U.S.’s Global Credibility," 30 May 2017
It has been determined that this will be a streetfight, and that every constitutional institution is as vulnerable to collateral damage as those cities in the Transformers movies are.

— charles p. pierce, Esquire, "Trump's White House Is Allegedly About to Get Way More Godfather," 30 May 2017
In February 2007 with the Clippers, Livingston tore three major ligaments in his knee — the anterior cruciate, posterior cruciate and medial collateral as well as his lateral meniscus, then required extensive surgery.

— janie mccauley, The Seattle Times, "Like Shaun Livingston, JaVale McGee perfect fit on Warriors," 29 May 2017

Origin and Etymology of collateral

see ¹collateral

NEW! Time Traveler

First Known Use: 1691

See Words from the same year

Other Business Terms

amortize, caveat emptor, clearinghouse, divest, due diligence, emolument, green-collar, marque, overhead, perquisite

Financial Definition of COLLATERAL

collateral

noun

What It Is

Collateral is an asset pledged by a borrower to a lender, usually in return for a loan. The lender has the right to seize the collateral if the borrower defaults on the obligation.

How It Works

Let's assume you would like to borrow $100,000 to start a business. Even if you have an excellent credit rating, a bank may be reluctant to lend you the money because it may be left with nothing if you default on the loan. Thus, the bank may require $100,000 of collateral in order to lend you the money. This collateral might consist of financial instruments, houses, cash, or even objects such as art, jewelry, or other items. You might also pledge your business receivables as well.

If you do in fact default on the loan, the loan agreement gives the lender the right to seize and then sell the collateral in order to recover any outstanding balance.

Why It Matters

Collateral is security, which is why collateralized loans often receive better interest rates than unsecured loans, since the lender bears less risk.

Although mortgages are one of the most common collateralized obligations (with the house being the collateral), many other kinds of lending circumstances require collateral. For instance, margin loans almost always require collateral. Frequently the collateral is the securities involved in the margin loan.

However, the type and amount of collateral required for a given loan is often a matter of negotiation between the lender and borrower. For instance, a lender might require a borrower to pledge any assets purchased during the loan period as additional collateral. In some cases, collateral for one obligation can also be collateral for other obligations (this is called cross-collateralization). This often occurs in real estate transactions, where a house collateralizes more than one mortgage.

Source: Investing Answers

COLLATERAL Defined for English Language Learners

collateral

play

adjective

Definition of collateral for English Language Learners

: related but not in a direct or close way

collateral

noun

Definition of collateral for English Language Learners

: something that you promise to give someone if you cannot pay back a loan

Medical Dictionary

collateral

play

adjective col·lat·er·al \ kə-ˈlat-ə-rəl, -ˈla-trəl \

medical Definition of collateral

1 :relating to or being branches of a bodily part

collateral sprouting of nerves

2 :relating to or being part of the collateral circulation

collateral circulatory vessels

collateral blood flow

collateral

noun

medical Definition of collateral

1 :a branch especially of a blood vessel, nerve, or the axon of a nerve cell

excitation of axon collaterals

2 :a bodily part (as a ligament) that is lateral in position

Law Dictionary

collateral

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adjective col·lat·er·al \ kə-ˈla-tə-rəl, -ˈla-trəl \

legal Definition of collateral

1 a :accompanying as a secondary fact, activity, or agency but subordinate to a main consideration

b :not directly relevant or material

a collateral evidentiary matter

a collateral issue

2 :belonging to the same ancestral stock but not in a direct line of descent — compare lineal

3 a :of, relating to, or being collateral used as a security (as for payment of a debt)

b :secured by collateral

a collateral loan

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collaterally

adjective

collateral

noun

legal Definition of collateral

1 :a collateral relative

2 :property pledged by a borrower to protect the interests of the lender in the event of the borrower's default; specifically, under Article 9 of the Uniform Commercial Code :property subject to a security interest