Pledge vs Mortgage
A mortgage is a loan secured by a real property. An owner pledges his/her right to the real property as security for a loan. Items of property can be movable assets (e.g. vehicles, machinery), rights (claims against the third party) or securities.
Both Pledge and Mortgage are two different methods of creating a charge on securities of the borrowers as collateral against a loan provided by the commercial banks or financial/lending institutions. However, there is some key difference between Pledge and Mortgage.
There always need some securities when it comes to the requirement of a loan/debt from any financial institution. When anybody/borrower approaches the banks or finance companies to get a loan, the banks ask for some security.
Depending upon types of loan and security the banks or other finance companies create a charge on those security/assets and then approve the loan.
