collateral

USAGE SUMMARY

The word "collateral" is correct and usable in written English.
You can use it to refer to something that is given or held as security for the repayment of a loan. For example, "The bank required the borrower to put up collateral before they could get the loan."

✓ Grammatically correct

News & Media

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

Any uncertainty and upset caused to pupils or parents involved with existing free schools is merely collateral damage in the great game of coalition, as ministers battle to keep hold of their chauffeur-driven cars and other perks of office.

The Guardian

There is likely to be collateral damage both to Labour and his new party; and – worst of all for a man who believes he can reinvent democracy – he cannot be at all confident that the pieces won't land in much the same pattern as before.

The Guardian - Opinion

But, in view of Greece's economic plight and the uncertain value of the banks' assets, the ECB discounts the value of the collateral they put up by around 40%.

The Guardian

And is Jason Russell scared to come out and admit that effective action entails an old-fashioned boots-on-soil invasion of a landlocked African country, with all the collateral damage that this implies?

The Guardian

The grey heron is the collateral damage here: it joins the avocet, little grebe and ringed plover among the birds that would be endangered by a four-runway behemoth appearing off the Isle of Sheppey.

The Guardian - Business

"Then, either the banks would have to find more collateral or the ECB would lend them less money.

The Guardian

When military leaders are given objectives, they achieve them at whatever collateral cost they are not explicitly prohibited from incurring.

The Guardian - Tech

It is also true, however, that innocent people of color inside those zones can be the collateral damage in the war both sides are fighting.

The Guardian

Even so, Brussels staffers say that the lighter touch of their regulation would avoid the risk of decimating Africa's mineral industry through the collateral damage caused by an investment flight.

The Guardian

Pat Davies, whose home is close to the proposed site at Preston New Road, says: "Lancashire is being used as a test ground and we are the collateral damage.

The Guardian

The Bank refuses to accept as collateral any form of commercial lending when it operates in the money and credit markets.

The Guardian - Opinion

Expert writing Tips

Best practice

When discussing financial matters, be precise about the type of "collateral" involved (e.g., real estate, stocks, bonds) to avoid ambiguity.

Common error

Avoid using "collateral damage" lightly; reserve it for situations where unintended harm results from an action aimed at a legitimate target.

Linguistic Context

The word "collateral" functions as both a noun, referring to an asset pledged as security for a loan, and as an adjective, describing something related or secondary. As Ludwig AI highlights, it's commonly used in financial and military contexts.

Expression frequency: Very common

Frequent in

News & Media

58%

Formal & Business

25%

Science

17%

Less common in

Academia

0%

Encyclopedias

0%

Wiki

0%

Ludwig's WRAP-UP

In summary, "collateral" is a versatile term with distinct meanings depending on the context. As Ludwig AI confirms, it commonly denotes an asset pledged as security in finance but also refers to secondary or unintended consequences. Its usage spans professional, neutral, and sometimes informal registers. When writing, specifying the type of "collateral" can improve clarity, especially in financial contexts. Be cautious using the term "collateral damage", reserving it for truly unintended harm. While "collateral" is very common in News & Media and Formal & Business, its use in academic or encyclopedic contexts is less frequent. Alternatives include "security deposit" and "guaranteed security" depending on the intended meaning.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

security deposit

Focuses specifically on a monetary deposit used as security.

pledged asset

Emphasizes the act of pledging an asset as security.

guaranteed security

Highlights the assurance provided by the security.

accompanying security

Highlights the supportive role of the security.

backing

A more general term for support or security.

assurance

Focuses on the guarantee or promise of repayment.

supporting material

Applicable when "collateral" refers to marketing materials.

indirect consequence

When used in the context of "collateral damage", this phrase focuses on the unintended results.

secondary effect

Similar to "collateral damage", but emphasizes the secondary nature of the effect.

guarantor

Focuses on the entity providing the guarantee rather than the guarantee itself.

FAQs

How is "collateral" used in finance?

In finance, "collateral" refers to an asset that a borrower offers to a lender to secure a loan. If the borrower defaults, the lender can seize the "collateral" to recoup their losses.

What is the difference between "collateral" and a "guarantee"?

"Collateral" is a specific asset pledged as security, while a "guarantee" is a promise by a third party to cover the debt if the borrower defaults. "Collateral" is a tangible item, whereas a "guarantee" is a contractual obligation.

When is "collateral" required for a loan?

"Collateral" is often required for secured loans, such as mortgages or car loans, where the lender wants to minimize their risk. The value of the "collateral" typically covers the loan amount.

What does "collateral damage" mean?

"Collateral damage" refers to unintended harm or casualties that occur as a result of an action, especially in military contexts. It's often used to describe civilian casualties in warfare.