A valuable article or property pledged as the security for a loan. In mortgage, land or buildings are used as collateral; share certificates or life insurance policies with a surrender value are used as collateral for bank loan; in pawnbroking the collateral pledged can be any portable valuable. If payments of interest and repayments of the principal are not made on time, in the last resort the lender can sell the collateral asset. This makes loans with collateral much safer for lenders than loans without adequate collateral. Individuals or firms who cannot offer collateral find it difficult and expensive to obtain loans.

• savings function
• Say's law
• scale
• scarce currency clause
• scarcity
• scatter diagram
• scenario
• Schedule A tax
• scope, economies of
• screening
• scrip issue
• SDR
• SEAQ
• search unemployment
• seasonal adjustment
• seasonal unemployment
• SEC
• secondary market
• second-best
• second-degree price discrimination
• second derivative
• second-hand
• second-order conditions
• second order of magnitude
• sector