Praise be to Allaah.
It is permissible for the borrower to give something that he
owns and that has monetary value, as collateral, whether the value of that
thing is less than the value of the loan, or the same, or greater, as a
guarantee or surety for the debt that the borrower is committed to paying
and so that the lender will be able to take his due if the borrower delays
paying him back.
Ibn al-Mundhir (may Allah have mercy on him) said:
They [the scholars] are unanimously agreed that giving
collateral when at home and when travelling is permissible.
End quote, al-Ijmaa‘, 148
It is not permissible for the lender to ask the borrower for
more than what he gave him or to stipulate that as a condition. The scholars
are unanimously agreed that every loan that brings a benefit is haraam riba;
it is not permissible to enter into such an agreement.
See also the answer to question no.
And Allah knows best.