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What is the difference between Hypothecation and Pledge?

Hypothecation and Pledge both the terms are used in loan. If a company takes a loan the collateral security is given by borrower for security for payment. But there is a slight difference between Hypothecation and Pledge. Let's find out:
Hypothecation:
1) It is a pledge ( formal agreement) a borrower give to lender against the loan.
2) In hypothecation the possession of collateral assets are not given to lender. The possession of assets are always in the hand of borrower.
3)  At the time of default of the loan payment the borrower has right to take the possession of assets to sell the assets to recover it's loan amount.
4)  In hypothecation two parties are involved Hypothecator ( borrower) and hypothecatee ( lender).
5) Hypothecation is registered under section 125 of Indian companies act 1956.

Pledge:
1) It is a bailment which means possession of assets are transfer from the borrower to lender but it doesn't mean the ownership of assets are also transfer from the borrower to lender.
2) In pledge the possession of assets are given to the lender. But lender has to take care of assets until the payment of loan.
3) At the time of default of the loan payment the borrower has a right to sell the assets to recover it's loan amount.
4)  In pledge two parties are involved pledgor ( borrower) and pledgee ( lender).
5) Pledge is registered under section 172 of Indian Contract Act 1872.

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