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When are terms Hypothecation, Lien, Charge, Pledge and Mortgage used in contract?

· Mortgage Loan,LAP Interest Rates,How to Apply LAP,LAP Debt Consolidate

All these terms hypothecation, lien, charge, pledge and mortgage have the same meaning. The most common use of these terms would be when someone takes a secured loan i.e. a loan which is secured by a collateral such as applying for Bajaj Finserv Loan Against Property.

If we talk about the definition,

  • Mortgage refers to an agreement between a borrower and a lender wherein a borrower secures a certain amount as funding against their real-estate property. This is one reason loans such as loan against property wherein the mortgaged asset is mostly a residential flat or a building or a piece of land qualifies as a mortgage loan.

  • Hypothecation, on the other hand, is the practice where a debtor pledges collateral to secure a debt or as a condition precedent to the debt, or a third party pledges collateral for the debtor. If you observe properly, the definition is very similar to the definition of mortgage.

  • Moving on to lien, it refers to a condition put forward by the borrower which basically makes the transfer of property possession temporary. As per the definition, lien means a right to keep possession of property belonging to another person until a debt owed by that person is discharged.

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