Blockchain Glossary

Collateral

August 30th, 2021   |   Updated on June 29th, 2022

The simple definition of collateral is that it’s a tangible or intangible asset that a borrower pledges to a lender to secure a loan. If a borrower defaults in their obligations to the secured lender under the loan documents, the secured lender can exercise remedies to foreclose on the collateral and try to sell it to recover the loan amount.