What term describes the property that will be pledged as collateral for a loan?

The term that describes the property pledged as collateral for a loan is "security." In lending agreements, security refers specifically to the asset that a borrower offers to a lender to secure the loan. Should the borrower default on the loan, the lender has the legal right to take possession of this collateral, providing recourse for the lender and reducing risk.

While "asset" reflects the value of the property in a general sense, it does not specifically imply its role as collateral for a loan. "Property collateral" might seem like a close term, but it is not the standard terminology used in legal and financial contexts; "security" is the correct and widely accepted term. "Guarantee," on the other hand, typically refers to a promise or assurance that the loan will be repaid, but it does not denote the physical property used as collateral. Thus, in the context of loans and financing, "security" is the appropriate term for the property pledged as collateral.