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Related to pledge: Pledge of Allegiance


Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


To pledge an asset as collateral on a loan without the lender taking possession of the collateral. It especially applies to mortgages: the borrower hypothecates when he/she pledges the house as collateral for payment of the mortgage, or he/she may hypothecate the mortgage in order to borrow against the value of the house. In both situations the borrower retains the house, but the lender has the right to take possession if the borrower does not service the debt. Hypothecation also occurs in trading: a broker will allow an investor to borrow money to purchase securities with those securities as collateral. The investor owns the securities but the broker may take them if the debt is not serviced, or if the value of the securities falls below a certain level. See also: Foreclosure, Margin account.

Pledged Asset

An asset that a borrower transfers to the possession of a lender as collateral for a loan. The borrower maintains ownership and all associated rights of the pledged asset. When the loan is repaid, the lender transfers possession back to the borrower. The pledged asset reduces the risk to the lender that the borrower will default, therefore possibly qualifying the borrower for some benefit, such as a lower interest rate. When buying a house, some mortgage borrowers will pledge an asset, such as stock, to the lender to qualify for a lower down payment. See also: Secured loan.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
However, the inclusion of additional information in the PD treatment does not seem to have a beneficial effect on the pledge size as is shown in Figure 4.11 The Figure indicates that the distribution of the pledge size in the ND treatment is mostly lower than the distribution of the pledge size for the corresponding BL treatment.
According to Prime Minister Nikola Gruevski, the electronic pledge registration takes the operations of the Pledge Register to a higher level.
In a statement, the Saudi ambassador to Sudan Faisal bin Hamed Mulla said the Saudi citizens and students currently in Sudan could vow their allegiance pledge to Prince Muqrin bin Abdulaziz Al Saud as Deputy Crown either by personally coming to the embassy headquarters or register their pledges through the cultural attache office's electronic website.
Clark said he would love to do more to see the veteran job pledge initiative grow.
Earlier this month, Giving Pledge announced seven new signatories from the U.S.
Michael Bloomberg: $350 million pledge, Johns Hopkins University
1) I pledge to stop buying Maoam Pinballs and eating them within 30 minutes.
The nation may be indivisible, but the Eugene City Council splintered on Monday during its inaugural recitation of the Pledge of Allegiance.
Mophane primary school in Gaborone's Block 5 location, on August 28 received the National Education Commitment Pledge, which serves as part of schools' code of conduct.
Gallagher CEO Signs Pledge for Workplace Diversity, Inclusion
Why and how this pledge was implemented leaves us with more questions than answers to our current social and economic woes.