What term refers to the pledge of property as collateral for a loan?

The term that refers to the pledge of property as collateral for a loan is "hypothecation." This term specifically involves using an asset to secure a loan while retaining ownership of that asset. In a hypothecation agreement, the borrower pledges their property, which acts as collateral for the borrower’s obligation to repay the loan. This means that if the borrower defaults, the lender has the right to take possession of the collateral specified.

The other terms, while related to financial transactions, do not specifically describe the nature of this pledge in the same way. Mortgaging involves transferring ownership of property to the lender until the loan is repaid, while securing and collateralization broadly describe the concepts of backing a loan with an asset but lack the specificity of hypothecation regarding the retention of ownership. Thus, hypothecation is the precise term that encapsulates the commitment of a property as collateral, maintaining a clear distinction in real estate financing concepts.