Definition of

Collateral

Collateral
Property that a borrower promises to give up to a lender in case they can't pay back the loan.

Example: you borrow $2,000 and use your car as collateral. If you don't pay back the loan according to the agreement (maybe you miss a monthly payment) they take your car. Ouch.
 
Search :: Index :: About :: Contact :: Contribute :: Cite This Page :: Privacy

Copyright © 2014 MathsIsFun.com