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  2. www.investopedia.com › terms › cCollateral - Definition and Examples - Investopedia

    Feb 23, 2024 · Key Takeaways. Collateral is an item of value pledged to secure a loan. Collateral reduces the risk for lenders. If a borrower defaults on the loan, the lender can seize the...

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  3. corporatefinanceinstitute.com › collateralCollateral - Definition, Collateral Value, Security & Liens

    Collateral is an asset that’s been pledged as security against credit exposure. Secured loans are supported by collateral; unsecured loans are not. Taking collateral does not make an otherwise bad borrower a good one. How Does Collateral Work?

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  5. blog.ffbf.com › what-is-collateral-and-why-is-itWhat Is Collateral and Why Is It Important - blog.ffbf.com

    Nov 23, 2020 · Collateral is an asset you are willing to pledge to a lender to secure credit. The asset is often physical, such as real estate or equipment, and its purpose is to protect the lender. If you default on your loan payments, the lender can seize and sell the collateral to recoup their losses.

  6. www.kotak.com › what-is-collateralUnderstanding Collateral: Meaning, Security, Loans & More

    Defining Collateral: At its core, collateral refers to assets or property a borrower offers to a lender as security for a loan. It's essentially a promise: if the borrower can't repay, the lender has the right to take the collateral to recover the funds.

  7. www.forbes.com › personal-loans › what-is-collateralWhat Is Collateral? – Forbes Advisor

    Mar 26, 2021 · Collateral is a thing of value that a borrower can pledge to a lender to get a loan or line of credit; common examples of collateral include real estate, vehicles, cash and investments.

  8. www.wallstreetoasis.com › finance › collateralCollateral - Definition, Types, Collateral vs. Security ...

    Collateral refers to an asset that a borrower offers to a lender as security for a loan. If the borrower defaults on the loan, the lender has the right to seize the collateral to recover the owed amount. Common types of collateral include real estate, vehicles, inventory, and accounts receivable.

  9. www.cnbc.com › select › what-is-collateralWhat is collateral on a loan — and when do you need it? - CNBC

    May 20, 2024 · Collateral is an asset you can pledge to secure financing. While it can be beneficial and even necessary with some loans, it's important to know the risks.