Definition, Meaning & Synonyms

collateralize

verb

/kəˈlæt.ə.rə.laɪz/

Definition

To secure a loan or credit by pledging an asset as collateral.

Examples

The company decided to collateralize its real estate to receive a larger loan.
He used his stocks to collateralize the loan when he needed money for his business.
Many borrowers choose to collateralize their loans to secure better interest rates.

Meaning

Collateralize means to provide an asset, such as property or securities, as a guarantee against a loan. If the borrower fails to repay, the lender has the right to take the collateral.