Purpose, Various types of charges:
1. Pledge - It is used when the bank (or, lender, known as pledgee) takes
actual possession of the securities, such as goods, certificates, golds,
etc, (you provide it to bank to avail loan) which are generally movable in nature.
Bank keeps the securities with itself, and provide loan to you.
Bank will return the securities (possession of goods) to you (borrower,known
as pledgor), after you repay all the debts (i.e., loan) to the bank. In case you
are unable to pay back, then the bank has the right to sell the assets,
and recover the loan amount (with interest).
Example - Gold loans, Jewellry loans, warehouse finance.
2. Hypothecation - It is used when you (borrower) have the
actual possessionof the asset, for which you have taken the loan. Generally,
this is charged against loans for movable assets, like car, bus, etc.
(i.e., vehicle loans). Here, the assets (bus, car, etc.) remain with you, and you
are hypothecated to the bank for the loan granted.
In case you are unable to repay the loan amount, then the bank has the right
to sell the asset (bus, car, etc.), (which is possessed by you) and recover the
total amount (with interest).
Example - Car loans, Bus loans, etc.
3. Mortgage - It is used when you (borrower) have the
actual possession of the assets, for which you are granted loan (e.g., house
loan), or against whichyou are granted loan (e.g., house
mortgaged). Mortgages are generally those assets, which
are permanently attached with Earth surface, like house, land, factory etc.
In case you are unable to repay the loan amount, the bank has
the right to seize and sell the mortgage, and recover the loan amount (with
interest).
4. Lien - It is almost similar to Pledge, except that in case of lien,
the lendercan only detain the asset/goods until the borrower repays the loan,
but have no right to sell the asset, unless explicitly declared in the lien
contract. (For a pledge, the lender can sell the asset, if the borrower is unable
to pay the loan). Loan against FD is a lien .
5. Assignment: It is done in case of loan is provided on documents of some
other organization. Like, Loan against assignment policies, NSC, etc. A
notification is required to be sent to the concerned organization to inform that the
original document is with you as a security for loan. Else, the customer can apply
with indemnity to the concerned organization for issuance of duplicate doc and
defraud you.
1. Pledge - It is used when the bank (or, lender, known as pledgee) takes
actual possession of the securities, such as goods, certificates, golds,
etc, (you provide it to bank to avail loan) which are generally movable in nature.
Bank keeps the securities with itself, and provide loan to you.
Bank will return the securities (possession of goods) to you (borrower,known
as pledgor), after you repay all the debts (i.e., loan) to the bank. In case you
are unable to pay back, then the bank has the right to sell the assets,
and recover the loan amount (with interest).
Example - Gold loans, Jewellry loans, warehouse finance.
2. Hypothecation - It is used when you (borrower) have the
actual possessionof the asset, for which you have taken the loan. Generally,
this is charged against loans for movable assets, like car, bus, etc.
(i.e., vehicle loans). Here, the assets (bus, car, etc.) remain with you, and you
are hypothecated to the bank for the loan granted.
In case you are unable to repay the loan amount, then the bank has the right
to sell the asset (bus, car, etc.), (which is possessed by you) and recover the
total amount (with interest).
Example - Car loans, Bus loans, etc.
3. Mortgage - It is used when you (borrower) have the
actual possession of the assets, for which you are granted loan (e.g., house
loan), or against whichyou are granted loan (e.g., house
mortgaged). Mortgages are generally those assets, which
are permanently attached with Earth surface, like house, land, factory etc.
In case you are unable to repay the loan amount, the bank has
the right to seize and sell the mortgage, and recover the loan amount (with
interest).
4. Lien - It is almost similar to Pledge, except that in case of lien,
the lendercan only detain the asset/goods until the borrower repays the loan,
but have no right to sell the asset, unless explicitly declared in the lien
contract. (For a pledge, the lender can sell the asset, if the borrower is unable
to pay the loan). Loan against FD is a lien .
5. Assignment: It is done in case of loan is provided on documents of some
other organization. Like, Loan against assignment policies, NSC, etc. A
notification is required to be sent to the concerned organization to inform that the
original document is with you as a security for loan. Else, the customer can apply
with indemnity to the concerned organization for issuance of duplicate doc and
defraud you.
No comments:
Post a Comment