diff --git a/pycardano/txbuilder.py b/pycardano/txbuilder.py
index f1f2ff50..4ecf99ed 100644
--- a/pycardano/txbuilder.py
+++ b/pycardano/txbuilder.py
@@ -1381,7 +1381,19 @@ def _set_collateral_return(self, collateral_return_address: Optional[Address]):
             tmp_val = Value()
 
             def _add_collateral_input(cur_total, candidate_inputs):
-                while cur_total.coin < collateral_amount and candidate_inputs:
+                cur_collateral_return = cur_total - collateral_amount
+
+                while (
+                    cur_total.coin < collateral_amount
+                    or 0
+                    <= cur_collateral_return.coin
+                    < min_lovelace_post_alonzo(
+                        TransactionOutput(
+                            collateral_return_address, cur_collateral_return
+                        ),
+                        self.context,
+                    )
+                ) and candidate_inputs:
                     candidate = candidate_inputs.pop()
                     if (
                         not candidate.output.address.address_type.name.startswith(
@@ -1391,6 +1403,7 @@ def _add_collateral_input(cur_total, candidate_inputs):
                     ):
                         self.collaterals.append(candidate)
                         cur_total += candidate.output.amount
+                        cur_collateral_return = cur_total - collateral_amount
 
             sorted_inputs = sorted(
                 self.inputs.copy(),
diff --git a/test/pycardano/test_txbuilder.py b/test/pycardano/test_txbuilder.py
index 1fc50f7f..93e3c554 100644
--- a/test/pycardano/test_txbuilder.py
+++ b/test/pycardano/test_txbuilder.py
@@ -8,7 +8,13 @@
 
 import pytest
 
-from pycardano import AssetName, RedeemerKey, RedeemerMap, RedeemerValue
+from pycardano import (
+    AssetName,
+    RedeemerKey,
+    RedeemerMap,
+    RedeemerValue,
+    min_lovelace_post_alonzo,
+)
 from pycardano.address import Address
 from pycardano.certificate import (
     PoolRegistration,
@@ -1042,6 +1048,61 @@ def test_collateral_return(chain_context):
         )
 
 
+def test_collateral_return_min_return_amount(chain_context):
+    original_utxos = chain_context.utxos(
+        "addr_test1vrm9x2zsux7va6w892g38tvchnzahvcd9tykqf3ygnmwtaqyfg52x"
+    )
+    with patch.object(chain_context, "utxos") as mock_utxos:
+        tx_builder = TransactionBuilder(chain_context)
+        tx_in1 = TransactionInput.from_primitive(
+            ["18cbe6cadecd3f89b60e08e68e5e6c7d72d730aaa1ad21431590f7e6643438ef", 0]
+        )
+        plutus_script = PlutusV1Script(b"dummy test script")
+        script_hash = plutus_script_hash(plutus_script)
+        script_address = Address(script_hash)
+        datum = PlutusData()
+        utxo1 = UTxO(
+            tx_in1, TransactionOutput(script_address, 10000000, datum_hash=datum.hash())
+        )
+
+        existing_script_utxo = UTxO(
+            TransactionInput.from_primitive(
+                [
+                    "41cb004bec7051621b19b46aea28f0657a586a05ce2013152ea9b9f1a5614cc7",
+                    1,
+                ]
+            ),
+            TransactionOutput(script_address, 1234567, script=plutus_script),
+        )
+
+        original_utxos[0].output.amount.multi_asset = MultiAsset.from_primitive(
+            {
+                b"1"
+                * 28: {
+                    b"Token" + i.to_bytes(10, byteorder="big"): i for i in range(500)
+                }
+            }
+        )
+
+        original_utxos[0].output.amount.coin = min_lovelace_post_alonzo(
+            original_utxos[0].output, chain_context
+        )
+
+        mock_utxos.return_value = original_utxos + [existing_script_utxo]
+
+        redeemer = Redeemer(PlutusData(), ExecutionUnits(1000000, 1000000))
+        tx_builder.add_script_input(utxo1, datum=datum, redeemer=redeemer)
+        receiver = Address.from_primitive(
+            "addr_test1vrm9x2zsux7va6w892g38tvchnzahvcd9tykqf3ygnmwtaqyfg52x"
+        )
+        tx_builder.add_output(TransactionOutput(receiver, 5000000))
+        tx_body = tx_builder.build(change_address=receiver)
+        assert tx_body.collateral_return.address == receiver
+        assert tx_body.collateral_return.amount.coin >= min_lovelace_post_alonzo(
+            tx_body.collateral_return, chain_context
+        )
+
+
 def test_wrong_redeemer_execution_units(chain_context):
     tx_builder = TransactionBuilder(chain_context)
     tx_in1 = TransactionInput.from_primitive(