Collateral – What does it mean?

Collaterals are assets pledged by borrowers to lenders, generally in return for or to back a loan. If a borrower will default on the obligation, the lender holds the right to confiscate or seize that collateral.

Often, it involves valuable property that’s owned by a person who is looking to borrow money. If the debt will not be paid back to the person or company who has furnished the money, parties have agreed that the lender will become the owner of the property. This video is about collateral mortgages.

So collateral stands for something that’s pledged as security or guarantee that a loan will be repaid or to be forfeited when the borrower will default on the loan.

To give you an example: “He put up/used his house as collateral for the loan” or “Mrs. Smith put her house up as collateral to get the bank loan”. In the medical field, the word “collateral” stands for a small nerve or blood vessel that’s growing out of a major blood vessel or nerve.

In the above sentences, “collateral” is a noun. There are various synonyms for “collateral” as a noun such as security, guarantee, surety, guaranty, bond, pledge, assurance, indemnity, insurance, pawn, indemnification, or backing. “Collateral” is also a film by┬áMichael Mann, starring Jamie Foxx and Tom Cruise. So here you could say “Hey, did you watch Collateral last night on HBO?

“Collateral” as an adjective is used to describe a person that has the same ancestor as someone else yet through a different bloodline like in “a collateral branch of our family”, or “cousins are collateral relatives”.

An adjective is a word that that describes a pronoun or a noun more closely, “collateral” branch. It is often used to describe a connected, but not so important, relation or to relate to the same family though indirectly related like in “the collateral sense of words” or “the collateral meaning of a word”. A person could be a collateral descendant of James Joyce, for example.

So there are several definitions of collateral as a noun.
Property as security collateral pledged by borrowers to protect the lender’s interests.
A collateral relative, like in “a collateral inherited the entire estate”.
A branch of a part of a body part, for example, a vein.
Informational materials like a brochure or fact sheet used to sell a service or product to a prospective buyer or customer like in “Attendees should have an ample supply of brochures, business cards, and marketing collateral to help potential customers remember them”.

Definitions of collateral as an adjective.
Accompanying as subordinate or secondary like in “He digressed into collateral subjects”.
More examples: “He made no direct objections, but some collateral ones”, “At the trial, collateral evidence was shown”, “Uncles, Nephews, and Cousins are collateral kinsmen”, “In ancient Greece, collateral states like Sparta and Athens…”, “The borrower had deposited bonds and stock with the lender to secure a collateral loan, “We must always try to destroy the enemy without causing any collateral damage”.

The word “collateral” is derived from the medieval Latin word “collateralis”. In Latin, “col” meant “together with” and “lateralis” means “side” (or later, from latus).