The difference is: 1. Different natures. The fundamental difference between pledge and mortgage is whether to transfer the possession of the secured property. 2. Different definitions. 3. Different methods.
In our work and life, we are easily confused when handling mortgages and pledges. Legally, specific items can only be pledged or mortgaged. It is particularly important to understand the difference between the two. Then what are the legal provisions? What is the difference between collateral and pledge? I have compiled relevant information on this issue.
1. The difference between pledge and collateral The fundamental difference between pledge and collateral lies in whether the possession of the secured property is transferred. The mortgage does not transfer the possession and management form of the pledged property, and the mortgagor is still responsible for the custody of the pledged property; the pledge changes the possession and custody form of the pledged property, and the pledgee is responsible for the custody of the pledged property. Generally speaking, the mortgagor shall bear the responsibility for damage or reduction in the value of the pledged property, and the pledgee shall bear the liability for the damage or reduction in the value of the pledged property. The creditor does not have the right to directly dispose of the mortgaged property, and needs to negotiate with the mortgagor or complete the disposal of the mortgaged property after a court judgment through litigation; the disposal of the pledged property does not require negotiation or court judgment, and the pledgee will not be able to dispose of the pledged property beyond the time specified in the contract. Can be disposed of. The principles of pledge loans and mortgage loans are the same
2. Definition of collateral Collateral refers to what is transferred by the debtor (mortgagor) to the creditor (mortgagee) to guarantee the performance of a certain obligation. Collateral. It can be tangible property or registered intangible property such as land rights, government bonds, life insurance, etc. In some countries, it is divided into movable mortgage and real estate mortgage. The former are movable objects, including negotiable instruments and certificates of ownership. The latter is like land and buildings. China does not distinguish between mortgage rights and pledge rights. According to the provisions of the Civil Code (effective from January 1, 2021), wherever property is provided as security, whether it is real estate, movable property or securities, and whether the possession is transferred or not, the property is called collateral.
3. Mortgage that can be used as collateral refers to property that has been used as a mortgage guarantee. According to the provisions of my country's Civil Code, Article 395, the following properties that the debtor or a third party has the right to dispose of can be mortgaged: (1) Buildings and other land attachments; (2) Construction land use rights; (3) ) Sea area use rights; (4) Production equipment, raw materials, semi-finished products, and products; (5) Buildings, ships, and aircraft under construction; (6) Transportation tools; (7) Other properties not prohibited from mortgage by laws and administrative regulations . The mortgagor may mortgage the properties listed in the preceding paragraph together.
4. Property that cannot be mortgaged Article 399 of the Civil Code: The following properties are not allowed to be mortgaged: (1) Land ownership; (2) Homesteads, private land, private hills and other collectively owned land The right to use, except those that can be mortgaged by law; (3) Educational facilities, medical and health facilities and other public welfare facilities of schools, kindergartens, medical institutions and other non-profit legal persons established for public welfare purposes; (4) The ownership and use rights are unknown or Disputed property; (5) Property that has been sealed, detained, and supervised in accordance with the law; (6) Other property that cannot be mortgaged according to laws and administrative regulations.
5. Definition of Pledge During the pledge period, the party accepting the pledge has the right to dispose of the pledge, such as selling it, etc., as long as the assets equivalent to the pledge are returned after the end of the pledge. Just give it to the pledger. Items that can be used as pledges
6. Things that can be pledged as pledges mainly fall into the following categories: 1. Pledge of chattels. Chattel pledges mainly include: ownership or legal disposal rights that are easy to realize, maintain value and keep, and are enjoyed by the pledger and can be circulated and transferred; 2. Money pledge. It is a specific monetary pledge in the form of a deposit or other forms. 3. Pledge of rights. Rights pledges mainly include the following categories: (1) Bills of exchange, promissory notes, and certificates of deposit. (2)Treasury bonds, financial bonds, and large corporate bonds. (3) Shares and stocks. (4) Life insurance policies with specific cash values ??that can be pledged according to law. (5) Property rights in trademark exclusive rights, patent rights, and copyrights that can be transferred according to law. (6) Other rights that can be pledged according to law. The above is the relevant content about the difference between mortgage and pledge. From the perspective of regulations, the difference mainly lies in whether to transfer the occupation of the property and the way to dispose of the two.
Collateral includes movable property and immovable property, and the pledged objects are movable property and rights. We can judge whether we need to apply for a pledge or a mortgage based on the difference between the two.