collateral
noun
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Definition of collateral
(Entry 1 of 2)
collateral
adjectiveDefinition of collateral (Entry 2 of 2)
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Other Words from collateral
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noun
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adverb
Examples of collateral in a Sentence
Adjective
the collateral effects of the government's policiesRecent Examples on the Web: Noun
Moody’s also noted that the downgrades would require PG&E to post an additional $800 million in collateral, possibly leading to further deterioration in its financial position. — Russell Gold, WSJ, "PG&E Prepares for Bankruptcy Amid Wildfire Fallout," 14 Jan. 2019 With this change, attempting to identify defunct ASes and block all their IPs would result in collateral blocking. — Dan Goodin, Ars Technica, "How 3ve’s BGP hijackers eluded the Internet—and made $29M," 21 Dec. 2018 Schlitterbahn's other water parks in Texas are EPR Properties' collateral for the KCK mortgage loan. — Steve Vockrodt, kansascity, "A month after Schlitterbahn's opening, four rides remain closed at the KCK water park," 10 July 2018 According to the study, athletes ages 15 to 19 accounted for 56.8 percent of ulnar collateral ligament reconstruction procedures — Tommy John surgery, as it is popularly known — from the start of 2011 through 2015. — Sam Donnellon, Philly.com, "Elbow injuries - and surgery - affect high school pitchers more than anyone else," 9 July 2018 Leave aside the argument that AI could help reduce collateral human damage in warfare, provide more humane policing of the border, and possibly even improve the government’s ability to reunite children with their parents. — Alan Murray, Fortune, "China Mobile, Glencore Woes, HTC Cuts: CEO Daily for July 3, 2018," 3 July 2018 But his attorney, Deputy Public Defender Kevin Brady, argued that the sentencing could not go forward under a legal principle called collateral estoppel, which is akin to double jeopardy. — Michael Kiefer, azcentral, "Serial rapist to be sentenced after authorities solve name mystery," 2 July 2018 The authority has several loan programs and also invests in energy projects but it is typically required to — unless directed via legislative policy — to achieve commercial returns on its investments, which also often require significant collateral. — Author: Elwood Brehmer, Anchorage Daily News, "Gas line corporation seeks loan from Alaska development bank," 7 June 2018 Their 3-year-old daughter shows a photo of the last collateral victim of the disappearances: the Cruz's other son, who hanged himself in despair. — Maria Verza, The Christian Science Monitor, "Forensic experts search for Mexico's missing," 4 June 2018Recent Examples on the Web: Adjective
Recent studies suggest that cells CRISPRed to treat disease might increase cancer risk, and that using the technology could cause significant collateral DNA damage; those won’t be the only studies to fuel fears. — Tamar Haspel, Vox, "The public doesn’t trust GMOs. Will it trust CRISPR?," 24 July 2018 If the value of that collateral declines, a shareholder might face a margin call, requiring them to stump up fresh cash. — Mike Bird, WSJ, "A Major Market’s Major Headache: Stocks That Crash Without Warning," 21 Jan. 2019 Since late last year, cryptocurrency prices have plummeted, lowering the value of the collateral Salt lent money against. — Shane Shifflett, WSJ, "Firm Tied to Cryptocurrency Entrepreneur Faces SEC Investigation," 15 Nov. 2018 Safety Net Deploys Bailouts, collateral, cash on hand — Fred Trump was prepared and was not about to let bad bets sink his son. — Susanne Craig, The Seattle Times, "Trump engaged in suspect tax schemes as he reaped riches from father," 2 Oct. 2018 The number could tick up if officers come across other undocumented immigrants in the course of their actions and make what are known as collateral arrests. — James Hohmann, Washington Post, "The Daily 202: Unexpected defeat in rural Wisconsin special election sets off alarm bells for Republicans," 17 Jan. 2018 Her little brother is dragged along to become a reluctant wolf pup: collateral camp damage. — Nalini Jones, New York Times, "When the Going Gets Tough, These Kids Find Their Way," 13 Apr. 2018 Shohei Ohtani swung a bat back in Southern California for the first time since sustaining a Grade 2 sprain of his right ulnar collateral ligament on June 6. — Jeff Miller, latimes.com, "Shohei Ohtani has been cleared to resume hitting, Mike Trout could return to center field Friday," 29 June 2018 The surgery pioneered by Dr. Frank Jobe involves replacing a torn or ruptured ligament in the elbow known as the ulnar collateral ligament with a tendon from another part of the body. — Craig Davis, Sun-Sentinel.com, "Teen Tommy John surgeries, youth sports injuries reach epidemic proportions," 28 June 2018These 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.
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More Definitions for collateral
collateral
nounFinancial Definition of collateral
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
noun
English Language Learners Definition of collateral
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collateral
adjectiveEnglish Language Learners Definition of collateral (Entry 2 of 2)
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collateral
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Medical Definition of collateral
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collateral
nounMedical Definition of collateral (Entry 2 of 2)
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collateral
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Legal Definition of collateral
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