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collateral

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asset pledged to secure fulfillment of a financial obligation (e.g. a loan)

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Pawning is an example of a common type of loan secured with collateral

In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan. The collateral serves as a lender's protection against a borrower's default and so can be used to offset the loan if the borrower fails to pay the principal and interest satisfactorily under the terms of the lending agreement.

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