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What is the difference between mortgage and pledge?

Mortgage is dealt as per transfer of property act, 1882 and pledge is regulated as per Indian Contracts Act, 1872.

Pledge is the bailment of goods as security for payment of debt, performance or promise. The Pawnee holds the possession of goods as security, but has no right of foreclosure; as there is no transfer of ownership. Right of enjoyment of property is also not given to the Pawnee.

Transfer of possession is very important in case of pledge but is not necessary in case of mortgage and depends on the type of mortgage. Under mortgage there is transfer of interest whereas in case of pledge, the Pawnee has only special right of detaining the goods till the repayment of loan is complete. Mortgagor has the right of redemption and the mortgagee has the right of foreclosure, where as the Pawnee does not have right of foreclosure.