collateral

Meanings

1. 1noununcountablefinancebusiness

   Property or an asset promised to secure a loan and taken by the lender if the debt is not repaid.

   Grammar: Used in finance with “for” or “against” a loan; do not say “a collateral.”

   Patterns

   • use something as collateral
   • collateral for a loan
   • put up collateral

   The bank asked them to use their house as collateral for the loan.

   Without collateral, the business could not borrow enough to expand.

2. 2adjectivebefore a noun

   Happening as an indirect, secondary, or unintended result of a main event.

   Grammar: Common fixed phrase: “collateral damage”; it does not mean financial security here.

   Patterns

   • collateral damage
   • collateral effect
   • collateral consequences

   The report examined collateral damage to nearby clinics.

   Higher rents were a collateral effect of the new stadium.

Common combinations

put up collateral

They put up their car as collateral to secure the loan.

collateral for a loan

Savings can serve as collateral for a small business loan.

collateral damage

The strike caused collateral damage to the port area.

collateral consequences

A criminal record can have collateral consequences for employment.

Synonyms and how they differ

security

Finance term for assets backing a loan; very close to collateral.

guarantee

Broader promise that a debt or duty will be met; may be personal rather than property.

side effect

For the adjective sense, a secondary result; “collateral” often implies unintended harm in conflict or policy.

Commonly confused: collateral or collaborate?

Practice

Make it your own

Write a sentence using “collateral”, then check it and compare it with the examples above.

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