Collateral

RECENT NEWS
Mondo Visione  Jan 18  Comment 
Four international CSDs develop a Blockchain prototype in cooperation with Deutsche Börse Targeted ‘LA Ledger’ solution to provide fast and efficient mobilisation of collateral Four members of the ‘Liquidity Alliance’ (LA), an...
The Hindu Business Line  Dec 26  Comment 
Aspada Investment Company has invested an undisclosed amount in Arya Collateral Warehousing Services Pvt Ltd, to strengthen the post-harvest value chain of agriculture commodities. The Noida-based ...
Reuters  Dec 23  Comment 
Venezuelan state oil company PDVSA said on Friday it has used 49.9 percent of its shares in U.S. subsidiary Citgo as collateral for loan financing, two months after having...
Forbes  Dec 17  Comment 
'Collateral Beauty' is a likely disaster, but 'La La Land' had a healthy expansion.
DailyFinance  Dec 16  Comment 
Filed under: Entertainment, Celebrity Style The biggest stars of new film "Collateral Beauty" stepped out on Thursday night for the movie's glamorous London premiere, and they all looked incredible. Helen Mirren, Will Smith, Naomie Harris...
Forbes  Dec 14  Comment 
It's disjointed and a little offensive, but 'Collateral Beauty' is one of the more original studio dramas I've seen in ages.
Mondo Visione  Dec 8  Comment 
New possibility to use cash as collateral Pricing will be linked to the deposit facility rate Changes aim to enhance effectiveness of PSPP securities lending Maximum overall limit of €50 billion for the Eurosystem Today, the...
The Economic Times  Oct 14  Comment 
Sebi allowed clearing members to have up to 30 per cent of their total liquid assets as commodities collateral.
The Hindu Business Line  Oct 6  Comment 
Faircent, a peer to peer lending marketplace, has tied up with bike taxi aggregator Baxi to provide easy access of two-wheeler loans to Baxi drivers. Faircent’s maiden venture into auto loans would e...
Mondo Visione  Sep 7  Comment 
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the publication of the ISDA 2016 China Collateral Memorandum. The memorandum provides information on the legal issues involved in exchanging collateral with a...




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Collateral is an asset or assets offered by a borrower in order to procure a loan. Should the borrower default on his payment(s), the lender would take possession of the collateral, which may then be sold to recoup the lender's losses.

Technically, collateral could be any asset, though typically it takes the form of personal property, investment securities, or real estate, the values of which can be readily determined.

Other terms in common use in the market are"margin", "margin asset" and "margin agreement" and similar terms using "credit support" instead of "collateral" or "margin," collateral", "collateral asset" and"collateral agreement." [1]

When a lender offers a loan against collateral offered by the borrower, the lender is said to take a security interest in the collateral. [2]

Examples

  • A woman takes out a mortgage to pay for her home. As collateral, she offers the home itself. Should she default on the loan, the lender (typically a bank) would take possession of the home. The bank may then sell the property to recoup its losses.
  • A man needs a cash loan to pay for several large, immediate expenses. As collateral, he offers the lender his car. Should he default on the loan the lender would take possession of the car, which he or she may sell to recoup losses.
  • In Uruguay, no private bank would accept cattle as collateral for a loan. By contrast, in Kansas, cattle are considered the best collateral for a loan.

14c., "accompanying," also "descended from the same stock," "side by side, "together" "parallel, along the side of" 16c., "colleague, associate." Meaning "thing given as security" is from 1832, Amer.Eng., from plrase collateral security (1720). [3]

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