In the context of a loan, what is typically considered not as collateral?

In the context of a loan, future projected income or salary is typically not considered as collateral because it is not a tangible asset that a lender can claim in the event of default. Collateral generally consists of physical or financial assets that have intrinsic value and can be easily valued and liquidated, such as savings accounts, real estate, and luxury items. These assets can be used to secure a loan, providing a safety net for the lender.

In contrast, future income is uncertain and contingent upon various factors, such as employment stability and earning potential. Lenders cannot seize or claim future income in the same way they can repossess a vehicle or foreclose on a property. Therefore, while projected income is an important factor in assessing a borrower's ability to repay a loan, it does not fulfill the criteria necessary to serve as collateral.