Collateral

byPaytm Editorial TeamLast Updated: December 12, 2025

Meaning & Definition

Collateral is an asset pledged by a borrower to secure a loan. If the borrower fails to repay, the lender can claim the collateral to recover the debt.

Key Features

  • Secures loans
  • Reduces lender risk
  • Can be property, gold, or other assets
  • Required for certain credit types

Author

Paytm Editorial Team

The Paytm Editorial Team is a collaborative group of writers, editors, and industry experts. We're dedicated to bringing you the latest insights, news, and guides on digital payments, financial services, and the technology that's shaping India's economy. We offer easy-to-follow guides and insights to help you explore Paytm’s products, features, and services. Our goal is to provide clear, reliable, and helpful information to empower you on your financial journey.

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