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Investopedia explains 'Collateral'
If you get a mortgage, your collateral would be your house. If you stop making your monthly house payments, the lender can take possession of the home through a process called foreclosure and sell it to get back the principal it lent you. In margin trading, the securities in your account act as collateral in case of a margin call. Similarly, if you were to stop making your payments on an auto loan, the lender would seize your vehicle. When you borrow money with a credit card, however, there is no collateral, so credit card debt carries a significantly higher interest rate than mortgage debt or auto loan debt.
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