What context can I use each word in?
Learn when and how to use these words with these examples!
collateral
Example
He used his car as collateral to secure a loan from the bank. [collateral: noun]
Example
The company required collateral in the form of property before approving the mortgage. [collateral: adjective]
guarantee
Example
The store offers a money-back guarantee if you are not satisfied with your purchase. [guarantee: noun]
Example
The manufacturer guarantees that their product will last for at least five years. [guarantees: verb]
Good things to know
Which word is more common?
Guarantee is more commonly used than collateral in everyday language. Guarantee is a versatile term that can be used in various contexts, such as product warranties, service agreements, and contractual obligations. On the other hand, collateral is more specific to financial transactions and loans.
What’s the difference in the tone of formality between collateral and guarantee?
Both collateral and guarantee can be used in formal and informal contexts. However, collateral is more commonly associated with formal and legal settings due to its connection with financial transactions and contracts.
