Banking
Cross Collateralization
March 27, 2021
Derivatives
Collared Floater with Participating Caps and Floors
March 27, 2021

The pledging of an asset or property by a borrower to secure a bank loan, where a lender has the right to recourse, i.e. to dispose of the asset in case of default. Collateralizing a loan is essentially meant to help a lender guarantee redeeming principal and receiving due interest amounts on time.

The collateralized asset (posted for securing a loan/ debt) is typically known as collateral.

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