Difference between Mortgage, Pledge and Hypothecation

Hello guys today we will learn what is hypothecation pledge and mortgage. This article will help you to understand the basic difference between pledge hypothecation and mortgage.

Charge

Basically all of them are different types of charges created on any property. Property can be of two type movable and immovable.

Charge created against in immovable property

Mortgage
In case if the charge is created against any  immovable property then it will be known as mortgage. For example:- charge created against land, building, house, etc.

Charge created against movable property.

If charges created against immovable property it can be of one among two types.

Pledge
Pledge is a type of charge created on a movable property. Under pledge the position of the property stays with the person who is giving the loan. For example:- loan against gold.

Hypothecation
Hypothecation is a charge created on a movable property. Under hypothecation possession of the property stays with the borrower (who is borrowing the money). For example:- loan for car in case you have taken a car loan then you will have the position of the property that is car, even if you are the borrower.