pledge

Dictionary of Banking Terms for: pledge
pledge

transfer or assignment of assets to secure payment of an obligation. Also called a security interest. The borrower assigns an interest in the property to the lender, which becomes a lien on the collateral. If the borrower offers stocks, bonds, or other securities as collateral, the lender generally takes possession or is assigned ownership of the collateral until the loan is paid.

Copyright (c) by Barron's Educational Series. Reprinted by arrangement with the publisher of this site.