Pledge

A pledge involves the transfer of possession of movable assets to the lender as security. Unlike a mortgage (which applies to immovable property), a pledge applies to movable assets like shares, mutual funds, gold, goods, and other valuables.

In Loan Against Securities, shares and mutual fund units are pledged by creating a pledge mark in the demat account. The borrower retains ownership and continues earning returns, but cannot sell the securities without releasing the pledge. If the borrower defaults, the lender can sell the pledged assets to recover the outstanding amount.

Understanding pledge mechanics helps investors use their securities portfolio as collateral without selling, maintaining long-term investment positions while accessing liquidity.

Nihal Fintech facilitates seamless pledge creation for Loan Against Securities, helping clients access funds against their investment portfolio with minimal disruption.