Collateral can sometimes help motivate the person you loan money to, to pay you back. Other times, they may think they don't have to pay you back since you can take their collateral. Before accepting collateral in the terms of the loan, you'll want to evaluate the value of the collateral and maybe even make arrangements to take possession of the collateral until the loan is paid in full. Common items used for collateral include real estate, cars, boats and recreational vehicles.