- Home
- Meet the Team
- Log In
- Contact
- Careers
- Search
- Search Results
- Branches & ATMs
- Rates
- Log In
- About MCU
- Join MCU
- Personal Banking
- Lending
- Meet the Team
- Loans
- Home Loans
- Conventional Mortgages
- Jumbo Mortgages
- High-Balance Mortgages
- Family Homes, Co-Ops, and Condos
- Investment Property
- ARMs
- Adam Gonda
- Xiang He Lin
- Sabrina Kilgore
- Omar Osoria
- Michele Palmucci
- Cesarina Pena
- Walter Skowronski
- Shantell Wynn
- Homebuyer Dream Program
- Heroes Home Improvement Loan
- Mortgage Center
- Credit Cards
- Insurance
- Member Resources
- MCU Financials
- Forms and Disclosures
- Privacy Policy
- Automated Telephone Banking
- Order New Checks
- Security & Fraud Alerts
- Privacy Notice
- Scholarship Search
- Schedule an Appointment
Collateral
Property or assets offered as security for a loan. If the borrower defaults, the lender can seize the collateral to recover the value of the loan.
More Details
Collateral is a type of asset that is pledged as security for a loan or other type of credit. It is used to reduce the lender's risk, by providing the lender with a way to recover its money if the borrower is unable to repay the loan.
Example
To build credit, you may want to open a secured credit card which uses collateral to guarantee you can pay your credit limit. This is usually in the form of a separate bank account.
Related Terms
Foreclosure
The legal process by which a lender repossesses a property when the borrower fails to make their mortgage payments.
Disclosure
The act of making information known to the public or to a specific individual or group.
Account Holder
A member with an active account, entitled to the institution's services and responsible for managing their account and transactions.