What does collateral mean?

a subordinate or accessory part. a side branch, as of a blood vessel or nerve. collateral circulation. a relative descended from the same stock, but in a different line. accompanying; auxiliary: He received a scholarship and collateral aid. additional; confirming: collateral evidence; collateral security. secured by collateral: a collateral loan.

What types of property can be used as collateral?

When using collateral, the lender might accept different types of property as a type of guarantee against your loan. Some of the most common types of collateral include: Real estate: Property that you own, including a home, land, or business property, can be used as collateral.

How do you think about collateral value?

There are two ways to think about collateral “value.” The first is its relative desirability; the second is its monetary value – although both are subject to market forces. How “Desirable” is the Asset? A useful tool to help conceptualize the overall desirability of collateral is the MAST framework.

How does a charge become a collateral security?

An asset becomes collateral security when a lender registers a charge over it, either by using a fixed or a floating charge. These charges are also known as liens. Examples of fixed charges include a collateral mortgage over a specific property or the registration of a charge over a unique identifier, like the serial number of a specific vehicle.