Pledge
What Pledge means
A security arrangement where the borrower physically delivers a movable asset (gold, shares, NSC, FD) to the lender; ownership stays with the borrower but possession is with the lender.
Example
A gold loan operates on pledge — you hand over 50g of gold to the bank, receive ₹2.5 lakh at 75% LTV, and reclaim the gold upon full repayment.
This definition is based on Transfer of Property Act, 1882 ↗. We link every figure to its primary source — see our data methodology.
Related legal & security terms
- Charge on PropertyA formal encumbrance registered with the sub-registrar or Registrar of Companies indicating that a lender holds a financial interest in the property as security for a loan.
- HypothecationA charge on a movable asset (vehicle, machinery) offered as loan security, where the borrower retains physical possession and use of the asset. The lender can seize it only on default.
- LienA lender's legal right to retain or claim a borrower's specific asset until the associated debt is fully repaid, preventing the asset from being transferred or encumbered.
- MortgageA charge on immovable property (land or building) created in favour of a lender as security for a loan, giving the lender the legal right to sell the property on default.