Zoho Bookings & SalesIQ Alignment

Disclaimer

The content on this website is for educational purposes only and does not constitute financial, investment, legal, or professional advice.

Neither FinE, nor associated institutions, including NSE, BSE, MCX, and NCDEX, assume any responsibility for investment decisions made based on this information.

Please consult a qualified financial professional before making investment decisions.

< Back

Hypothecation

Meaning: 

Hypothecation is a financing arrangement where you pledge movable assets, like a car or machinery, as security for a loan while still using them. You keep ownership of the asset, but the lender can take it if you don’t repay the loan.


Example:

If you take a loan to buy a car, the car is hypothecated to the bank, meaning the  bank has a claim to it until you pay back the loan.


How to understand Hypothecation:

It helps people get loans by using their belongings as security. 
If you don’t pay back the loan, the bank can take the asset.

Importance of Hypothecation:   

It makes borrowing easier and often leads to lower interest rates because the lender has something to secure their loan.

Launch your GraphyLaunch your Graphy
100K+ creators trust Graphy to teach online
FinE Financial Empowerment for Everyone 2025 Privacy policy Terms of use Contact us Refund policy