Word: Collateral
Part of Speech: Noun
Meaning: Something valuable that is given as security for a loan, which can be taken if you cannot repay the loan.
Synonyms: Security, pledge, assurance
Antonyms: Liability, debt
Example 1: The bank required collateral before approving the loan for the new business.
Example 2: He offered his house as collateral to ensure he could borrow the money he needed.
Example 3: When taking out a mortgage, it is common to use the property as collateral for the loan.
The word "collateral" comes from the Latin word "collateralis," which means "lying together." This reflects the idea that collateral serves as a "together" or accompanying security when borrowing money.
"A loan is a collateral that must be protected, for it bears the weight of trust." Anonymous
1. What does "collateral" mean?
a) Something to eat
b) A valuable security for a loan
c) A type of animal
d) A kind of clothing
Answer: b) A valuable security for a loan
2. Which of these is a synonym of "collateral"?
a) Debt
b) Liability
c) Security
d) Risk
Answer: c) Security
3. What is the opposite of "collateral"?
a) Pledge
b) Liability
c) Assurance
d) Guarantee
Answer: b) Liability
4. Which sentence uses "collateral" correctly?
a) The collateral played outside during the sunny day.
b) He used his savings as collateral to buy a car.
c) She enjoys eating collateral for breakfast.
d) Collateral can fly very high in the sky.
Answer: b) He used his savings as collateral to buy a car.
5. What does the idiom "put up collateral" mean?
a) To donate money to a cause
b) To provide security for a loan
c) To offer a service in return
d) To lose something valuable
Answer: b) To provide security for a loan
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