collateral
C1Formal, Technical (Finance, Law, Military)
Definition
Meaning
Something pledged as security for the repayment of a loan, to be forfeited in the event of a default.
Additional but secondary; accompanying; situated side by side or running parallel; related but indirect.
Linguistics
Semantic Notes
Primarily a noun in finance/law meaning 'security'. As an adjective, it often means 'secondary', 'accompanying', or 'parallel'. In military contexts, it refers to damage or casualties incidental to the main target.
Dialectal Variation
British vs American Usage
Differences
Usage is highly consistent between BrE and AmE in financial/legal contexts. The adjective meaning 'secondary' is slightly more common in AmE academic/professional writing. The term 'collateral damage' originated in US military jargon but is now universal.
Connotations
In finance: neutral/technical. As 'collateral damage': strongly negative, implying unintended, often tragic, consequences.
Frequency
Higher frequency in AmE due to broader use in business and media (e.g., 'collateral damage').
Vocabulary
Collocations
Grammar
Valency Patterns
[Bank] requires [collateral] for [loan][Asset] serves as collateral against [debt]The [attack] resulted in [collateral damage][Point A] is collateral to [Point B]Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “collateral damage”
- “by collateral descent (legal)”
Usage
Context Usage
Business
The small business had to put up its commercial property as collateral for the expansion loan.
Academic
The researcher examined the collateral effects of the economic policy on public health.
Everyday
I used my car as collateral to borrow money from my brother.
Technical
The angiogram showed the development of collateral blood vessels around the blockage.
Examples
By Part of Speech
noun
British English
- The bank insisted on tangible collateral before approving the mortgage.
- He lost his house when he could not repay the loan and the collateral was seized.
American English
- She used her investment portfolio as collateral for the business line of credit.
- The loan-to-value ratio depends heavily on the appraisal of the collateral.
adjective
British English
- The investigation uncovered several collateral issues that required addressing.
- A collateral benefit of the new policy was improved community relations.
American English
- The report detailed the collateral consequences of the sentencing guidelines.
- We must consider any collateral risks before proceeding with the merger.
Examples
By CEFR Level
- The bank asked for collateral before giving him the money.
- Unfortunately, the airstrike caused significant collateral damage to the civilian infrastructure.
- Without sufficient collateral, securing a favourable interest rate for the loan proved impossible.
- The contract included clauses covering all collateral agreements between the parties.
- The family's art collection was pledged as collateral against the multi-million pound restructuring loan.
- The philosopher argued that happiness is not the goal but merely a collateral outcome of a life well-lived.
Learning
Memory Aids
Mnemonic
Think of a COLLateral LATERAL ligament in the knee – it runs alongside the main joint, just as collateral assets support a main loan.
Conceptual Metaphor
SECURITY IS A PHYSICAL OBJECT (you 'put up' collateral). SECONDARY IS PARALLEL/SIDE-BY-SIDE (collateral lines, collateral damage).
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid confusing with 'коллегиальный' (collective, collegial). The Russian financial term 'залог' covers both 'collateral' and 'mortgage'. For the adjective, 'побочный' or 'косвенный' are often better than a direct cognate.
Common Mistakes
- Using 'collaterally' as a common adverb (it's very rare). Confusing 'collateral' with 'co-lateral' (not a word). Using it to mean 'colleague' or 'collective'.
- Incorrect: 'We made a collaterally decision.' Correct: 'We made a joint decision.' or 'It was a collateral agreement.'
Practice
Quiz
In which context is 'collateral' used to mean 'unintended and undesirable consequences'?
FAQ
Frequently Asked Questions
Its most common use is in finance and banking, where it refers to an asset a borrower offers to a lender to secure a loan.
No, 'collateral' is not used as a verb. You might use verbs like 'pledge', 'offer', or 'use' with it (e.g., 'to pledge something as collateral').
It refers to deaths, injuries, or damage to people or property that are unintended and incidental to the targeting of military objectives.
In finance, they are often synonyms. However, 'security' can be broader, referring to any financial instrument (like a bond or stock), while 'collateral' is specifically an asset pledged for a loan.
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