Margin pledge means that the borrower deposits money in a special account opened by the borrower in a bank and promises to use the money in the account as a guarantee to repay the loan. When the borrower fails to repay the debt, the lending bank has the right to directly deduct the deposit from the special deposit account to use it as a guarantee for repaying the loan.
Legal Basis
Article 388 of the Civil Code
To establish a security right, the security shall be entered into in accordance with the provisions of this Law and other laws. contract. Guarantee contracts include mortgage contracts, pledge contracts and other contracts with guarantee functions. The guarantee contract is a subordinate contract to the main creditor's rights and debts contract. If the principal creditor's rights and debt contract is invalid, the guarantee contract shall be invalid, except as otherwise provided by law.
After the guarantee contract is confirmed to be invalid, if the debtor, guarantor and creditor are at fault, they shall each bear corresponding civil liability according to their faults.