A security deposit is a form of collateral, or item of value, that is pledged when making a financial agreement. It can be used for a range of business agreements, such as contracts, rentals, or purchases. For example, when you rent an apartment, you have to put down a security deposit, and if you do damage to the apartment or stop paying rent, the deposit is forfeited.
Posts Tagged ‘Collateral’
A Security Deposit is…
Friday, August 21st, 2009Collateral is…
Friday, July 17th, 2009Collateral is something of value (e.g. your house, your credit card, your firstborn) that you give to a lender until you’ve repaid your debt. If you don’t repay your debt, the lender gets to keep whatever you’ve put up as collateral. For instance, if you loan your friend $10, you can keep his sunglasses as collateral until he gives you the money back.