Collateral Meaning: Here’s What It Means and How To Use It?

What’s collateral, and how is it used in a sentence? This article will tell you everything you need to know about the word collateral.

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Financial experts estimate that around 80 percent of Americans have some form of consumer debt. It’s probably safe to say that most people have experience borrowing money from a lender, whether directly or indirectly. 

When offering a loan, lenders want to limit their risk as much as possible to ensure that they get their money back. That’s where collateral comes in — but what exactly is collateral?  

Read on to discover our complete guide on the word collateral. 

What Is the Definition of Collateral?

/kəˈlæt̬.ɚ.əl/ /kəˈlæt.ər.əl/

Have you ever gone to the bowling alley and traded your favorite kicks for a pair of bowling shoes? Or do you recall one of the many poker movies where the main character places his watch on the betting table? These are all forms of collateral. If you pay back all your debts, you’ll get your valuable items back. 

When used as an adjective, our word of the day can describe something indirect — like collateral damage or a collateral relative. 

What Is the Word Origin of Collateral?

History traces the first use of collateral — defined as attendant or accompanying — back to the late 14th century. Collateral is a derivative of Medieval Latin collateralis and lateralis (or lateral), which means “with, together, or jointly” when combined.

Eventually, the term collateral came to mean “belonging to the same ancestral stock but not in a direct line of descent.” So, for example, relatives can be considered collateral family members. The history is a bit blurry, but it’s likely from this meaning that the adjective version of our word of the day came to be. 

What Are Translations of Collateral? 

Did you know that there’s more than one way you can say our word of the day? Yup, it’s true — with this in mind, here are some of the most common translations of collateral:

  • Chinese (Traditional) — 擔保品,抵押品, 側,副(血管或神經), 附帶的,次要的
  • Chinese (Simplified) — 担保品,抵押品, (血管或神经)侧支, 附带的,次要的
  • Spanish — garantía, fianza, secundario
  • Portuguese — garantia, fiança, secundário
  • German — die Sicherheit, zusätzlich, unterstützend
  • Czech — majetková záruka daná věřiteli, vedlejší, dodatečný
  • Vietnamese — tài sản thế chấp, phụ thêm
  • Turkish — teminat, güvence
  • French — nantissement, collatéral
  • Italian — collaterale, accessorio
  • Ukrainian — забезпечення (боргу, побічний, додатковий
  • Russian — залог
  • Polish — gwarancja, zabezpieczenie

Now, you can talk shop with financiers all across the world! 

What Are the Synonyms and Antonyms of Collateral?

Now that you understand what collateral means, let’s take a look at a thesaurus to review a few synonyms and antonyms, shall we? But first — what’s a synonym? And what’s an antonym?

Simply put, a synonym is a word that means the same thing as another word. Synonyms of collateral include:

  • Secondary
  • Less important
  • Small fry
  • Auxiliary
  • Running alongside
  • Ancillary
  • Bush-league 
  • Of little account 
  • Supporting
  • Accessory 
  • Extending equally
  • Ensuing
  • Collateral circulation
  • Blood vessel 
  • Not germane 
  • Redundant 
  • Nonessential 
  • Never meeting
  • Consequential
  • Associated
  • Indirect
  • Collateral loan
  • Besides the point 
  • In the same direction
  • Concomitant
  • Tributary
  • Superfluous 
  • Neither here nor there
  • Side by side
  • Linked 
  • Collateral security 
  • Nothing to do with it
  • Coexisting 

In general, an antonym refers to a word with an opposite meaning. Antonyms of collateral include:

  • First-rate
  • More important 
  • Consequential
  • Significant
  • Predominant
  • Preeminent
  • Most important
  • Nonparallel
  • Convergent
  • Divergent
  • Perpendicular
  • Zigzag
  • Skew
  • Breach
  • Merging
  • Ignorance
  • Incompetence
  • Lack
  • Possessions 
  • Neatness
  • Sense
  • Loss
  • Forfeit
  • Losing
  • Mulct 
  • Giving up

How Can You Use Collateral in a Sentence?

Ready to put your newfound knowledge to the test? Quiz yourself to see how many sentences you can come up with that have proper usage of the term collateral. If you need some help, feel free to explore our usage examples listed below:

“I am sure you are aware that to obtain most short-term loans, you will be required to provide some form of collateral, right?”

“Collateral evidence was presented at the trial last weekend.”

“Tom didn’t pay back his loan, so the lender collected his collateral.” 

“If you’re looking for personal loans, you need to be prepared to put something up as collateral.”

“The ban on gas imports has the collateral effect of hiking up the price of fuel.” 

“After tearing a medial collateral ligament in my left knee, I had to get surgery.”

“The collateral ridges of the mountains are breathtaking.”

“Did you know that if you borrow money from a credit card, you don’t have to give the lender any collateral?”

“In order to purchase her dream house, Suzie was asked to put up a lot of collateral.”

“Many folks use personal assets as collateral for small business loans.”

“Martha agreed to lend the company $10 million, using its assets as collateral.”

“Have you decided which asset you’re willing to give to your lender as collateral?”


To recap, collateral is anything you promise to give to another if you can’t repay your debt, whatever that reason may be. 

Our word of the day, collateral, can also be used as an adjective. In this sense, collateral refers to something off to the side or something indirect — chiefly collateral damage or collateral relatives.

Don’t forget to come back to The Word Counter for more fun words of the day to keep expanding your vocabulary!


  1. Collateral definition and meaning | Collins English Dictionary 
  2. COLLATERAL : definition | Cambridge English Dictionary 
  3. What is another word for collateral? | Word Hippo