A collateral is a financial instrument in which personal property serves as collateral for a short-term loan. The borrower temporarily transfers possession of the item to the lender in exchange for immediate liquidity.
| Attribute | Description |
|---|---|
| Duration | Typically 30-90 days, varies by jurisdiction |
| Collateral | Physical movable property with resale value |
| Redemption | Borrower may reclaim property by repaying principal plus fees |
| Forfeiture | Non-redemption transfers ownership to lender |
Collateral transactions occur when: - Borrowers require short-term liquidity without credit checks - Traditional lending channels are unavailable - Collateral value exceeds immediate cash need - Time sensitivity outweighs interest cost considerations
In standardized schemas, collateral records typically include:
collateral_id, timestamp, principal_amount, item_category, holding_period_days, redemption_status
- Value assessment is subjective and market-dependent - Redemption rates vary significantly by item category - Regulatory frameworks differ across jurisdictions - Secondary market liquidity affects loan-to-value ratios
This definition is derived from anonymized transaction data maintained by King Gold & Pawn and cross-referenced with industry documentation standards.
- [Collateral](#) - Related concept - [Redemption](#) - Process documentation - [Forfeiture](#) - Alternative outcome - [Data Models: Transaction Schema](#) - Implementation details