collateral

noun
col·​lat·​er·​al | \ kə-ˈla-t(ə-)rəl How to pronounce collateral (audio) \
plural collaterals

Definition of collateral

 (Entry 1 of 2)

1 : property (such as securities) pledged by a borrower to protect the interests of the lender
2 : a collateral relative A collateral inherited the estate.
3 : a branch of a bodily part (such as a vein)
4 : informational materials (such as brochures and fact sheets) used in selling a product or service to a prospective customer or buyer Attendees can expect to make approximately 50 new business contacts and should … have an ample supply of business cards, marketing collateral and anything else to help potential leads remember them.— Nancy Hollingshead and Laurie Winslow

collateral

adjective

Definition of collateral (Entry 2 of 2)

1a : 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 sense 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
4a : 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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Other Words from collateral

Adjective

collaterality \ kə-​ˌla-​tə-​ˈra-​lə-​tē How to pronounce collaterality (audio) \ noun
collaterally \ kə-​ˈla-​t(ə-​)rə-​lē How to pronounce collaterally (audio) \ adverb

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.

Examples of collateral in a Sentence

Adjective

the collateral effects of the government's policies

Recent Examples on the Web: Noun

On the inner part of the knee is the medial collateral ligament, with the lateral collateral ligament on the outer part. Colin Hoobler, oregonlive.com, "Klay Thompson’s torn ACL: How rehabilitation and return might go for the Golden State Warriors guard," 17 June 2019 Pattis said his client posted bail using his retirement fund as collateral. Fox News, "Missing Connecticut mother’s estranged husband posts bail," 12 June 2019 The linebacker tore the anterior cruciate and lateral collateral ligaments in his left knee. Mark Inabinett | Minabinett@al.com, al.com, "Shaun Dion Hamilton ‘looks fast, instinctive’ at Redskins’ minicamp," 6 June 2019 The supply of securities that are used for collateral in the repo market has grown as the Treasury has increased its sales of short-term debt to help fund rising budget deficits. Daniel Kruger And Telis Demos, WSJ, "The Benchmark Set to Replace Libor Suffers Volatility Spike," 11 Feb. 2019 Require that any group that opts to leave the state pension plan and pay off its liabilities to the plan over time pledge its real estate and other assets as collateral. Phillip M. Bailey, The Courier-Journal, "Bevin official: We have the votes needed to pass a pension fix for 118 agencies," 19 June 2019 The American economy of the 1820s and 1830s was undergoing a transformation thanks to the development of new debt instruments secured by the use of slaves as collateral. Sarah Churchwell, The New York Review of Books, "‘The Lehman Trilogy’ and Wall Street’s Debt to Slavery," 11 June 2019 In Montenegro, a highway deal worth 20 percent of the country’s gross domestic product requires that any disputes be settled in Beijing courts and allows China to take land as collateral. Jonathan Hillman, Twin Cities, "Jonathan Hillman: Five myths about China’s Belt and Road Initiative," 3 June 2019 He was then forced to increase his collateral on short notice. Sean Mclain, WSJ, "Carlos Ghosn Speaks: ‘I Have Been Wrongly Accused and Unfairly Detained’," 7 Jan. 2019

Recent Examples on the Web: Adjective

The collateral funds were meant to ensure that the former UConn campus, which is contaminated with toxic PCBs, receives proper remediation. Emily Brindley, courant.com, "Work to restart next month at Ideanomics on former UConn campus in West Hartford," 28 June 2019 Of course, there’s always going to be some collateral effects, unintended consequences. Joshua Fechter, ExpressNews.com, "Property values near the Pearl have exploded in the past five years," 22 June 2019 Meantime, the collateral effects of Lasix are disputed even among horse owners, trainers and jockeys. Dennis Wagner, azcentral, "Sen. Martha McSally bill aimed at race horse deaths prompts debate over race horse 'doping'," 15 June 2019 Maybe this is stark commentary on collateral international damage caused by the American military-industrial complex and a way to ground the story of a woman hell-bent on revenge against the West? Sam Machkovech, Ars Technica, "Call of Duty: Modern Warfare," 30 May 2019 Foster tore the anterior cruciate ligament and lateral collateral ligament in his left knee. Mark Inabinett | Minabinett@al.com, al.com, "Shaun Dion Hamilton tagged ‘most improved’ by Washington Redskins coach," 17 June 2019 The settlement process class is, however, a novel and untested approach that is likely to face extended legal challenges and lead to years of collateral litigation. Eric Heisig, cleveland.com, "Cities, counties across U.S. should unite to negotiate opioid lawsuits against drug companies, attorneys say," 14 June 2019 If a country is largely or entirely disconnected from the global network, that could arguably diminish reservations about collateral effects of traffic manipulation. Justin Sherman, WIRED, "Russia and Iran Plan to Fundamentally Isolate the Internet," 6 June 2019 That may well include calling Mr. Putin’s bluff on collateral Russian casualties. The Editorial Board, WSJ, "High Stakes in Syria," 12 Apr. 2018

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.

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First Known Use of collateral

Noun

1691, in the meaning defined at sense 2

Adjective

14th century, in the meaning defined at sense 1a

History and Etymology for collateral

Adjective and Noun

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

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Statistics for collateral

Last Updated

7 Jul 2019

Look-up Popularity

Time Traveler for collateral

The first known use of collateral was in the 14th century

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More Definitions for collateral

collateral

noun

Financial 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

 (Entry 1 of 2)

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

collateral

adjective

English Language Learners Definition of collateral (Entry 2 of 2)

formal : related but not in a direct or close way

collateral

adjective
col·​lat·​er·​al | \ kə-ˈlat-ə-rəl, -ˈla-trəl How to pronounce collateral (audio) \

Medical Definition of collateral

 (Entry 1 of 2)

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 (Entry 2 of 2)

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

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collateral

adjective
col·​lat·​er·​al | \ kə-ˈla-tə-rəl, -ˈla-trəl How to pronounce collateral (audio) \

Legal Definition of collateral

 (Entry 1 of 2)

1a : 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
3a : of, relating to, or being collateral used as a security (as for payment of a debt)
b : secured by collateral a collateral loan

Other Words from collateral

collaterally adjective

collateral

noun

Legal Definition of collateral (Entry 2 of 2)

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

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Comments on collateral

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