Overcollateralization
noun ·Rare ·Advanced level
Definitions
- 1 The act or process of overcollateralizing. countable, uncountable
"The specific requirements for overcollateralization can vary depending on the type of loan or financial arrangement. Lenders often assess the risk profile of borrowers to determine the appropriate level of overcollateralization needed. For example, in mortgage-backed securities, the overcollateralization ratio may be higher to account for the potential volatility in the housing market."
Example
More examples"The specific requirements for overcollateralization can vary depending on the type of loan or financial arrangement. Lenders often assess the risk profile of borrowers to determine the appropriate level of overcollateralization needed. For example, in mortgage-backed securities, the overcollateralization ratio may be higher to account for the potential volatility in the housing market."
Etymology
From over- + collateralization.
More for "overcollateralization"
Data sourced from Wiktionary, WordNet, CMU, and other open linguistic databases. Updated March 2026.