Pledge

An item transferred by a borrower to a lender, as a security for a debt.

The borrower remains the legal owner of the item, but if the borrower fails to repay the loan the lender has the right to sell it and to use the proceeds to pay the debt.

The lender normally retains physical possession of the asset until the debt is repaid.

See also

• Fixed charge
• Lien
• Mortgage
• Remedy
• Garnishee order
• Covered bond