What does Collateral mean?

Collateral is a guarantee provided by the client to secure a loan or facility, such as a deposit, property, car, or other asset, depending on the financing.

Key points

• If the client defaults on their obligations, the bank may have the right to seize the collateral according to the contract and applicable law.

• Having strong collateral can help with pricing or approval, but it does not absolve the client of their responsibility to repay the debt.

Source

• Central Bank of Egypt — Consumer Protection