difference between asset and collateral
In simple words, collateral is an asset which borrower pledge to the lender as a security against the loan. In case borrower failed to pay back the loan amount to the lender, lender can sell the asset to recover his loan amount hence reduces the risk of lender.
Collateral is something physical that you use to secure something, for example, a loan. A pledge is a promise and may or may not be in writing. For example, when you go to the bank to secure a loan you usually have to put up something like real estate or stocks, as well as promising to pay it back.