Definition: Collateral is property pledged as security for an obligation.
Example
A home secures a mortgage debt; the lender has remedies against that collateral if the obligation is not met.
Keep the distinction clear
The collateral is the property securing repayment. The promissory note contains the repayment promise; they are not the same thing.
Related terms
Mortgage · Promissory Note · Hypothecate
Keep studying
Mortgages: Borrower, Lender, Ownership, and Key Clauses
References: Cornell LII: collateral
Pronunciation (US): kuh-LAT-er-uhl (capitals show stress)
Pronunciation reference: Merriam-Webster
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