Credit
What is Collateral? — Meaning, Definition & Example
Definition
Collateral is an asset pledged as security for a loan. If the borrower defaults, the lender can seize the collateral. Secured loans (home, car, gold) require collateral and have lower interest rates. Unsecured loans (personal, credit card) don't need collateral but cost more.
💡 Real Example
In a home loan, the property itself is the collateral. If you stop paying EMIs, the bank can auction your house to recover the loan amount.
🇮🇳 Collateral in Hindi / हिंदी में
कोलैटरल (संपार्श्विक) — कोलैटरल लोन की सुरक्षा के रूप में गिरवी रखी गई संपत्ति है। सिक्योर्ड लोन की ब्याज दरें कम होती हैं क्योंकि कोलैटरल होता है।
Collateral (Hinglish) — Collateral wo asset hai jo loan ki security ke roop mein pledge kiya jaata hai. Default hone pe lender collateral seize kar sakta hai.
❓ Frequently Asked Questions
What is Collateral in simple words?
Collateral is an asset pledged as security for a loan. If the borrower defaults, the lender can seize the collateral. Secured loans (home, car, gold) require collateral and have lower interest rates. Unsecured loans (personal, credit card) don't need collateral but cost more.
Can you give an example of Collateral?
In a home loan, the property itself is the collateral. If you stop paying EMIs, the bank can auction your house to recover the loan amount.
What is Collateral meaning in Hindi?
In Hindi, Collateral is called कोलैटरल (संपार्श्विक). कोलैटरल लोन की सुरक्षा के रूप में गिरवी रखी गई संपत्ति है। सिक्योर्ड लोन की ब्याज दरें कम होती हैं क्योंकि कोलैटरल होता है।