Loans and its formalities are extremely complicated in my opinion. I have availed two major loans so far in my life and the process was lengthy and somewhat complicated. I came across so many terms and documents. But thankfully, I have a banker friend who is helpful and decided to answer all my annoying questions with utmost patience. I remember at one instance I asked him what is deed of hypothecation as I was in the middle of taking a home renovation loan and my agent advised me to sign this document. This is what my friend told me.
From what I understand, deed of hypothecation is signed when a borrower agrees to give a movable asset as collateral without promising its ownership to the lender. There is an agreement signed for this arrangement between the two parties and that agreement is known as composite hypothecation agreement or deed of hypothecation or hypothecation agreement.
Generally, the asset given as collateral is a vehicle in a hypothecation loan.
You can check out this document to know hypothecation deed formatThe key clauses added in deed of hypothecation are:
Obligations and responsibilities of both the parties
Security offered details
Title and ownership status of collateral
Repayment of loan details
Interest applicable
Insolvency clauses
Amendments
I hope now you have full clarity just like me on what is deed of hypothecation and its format.
Read more:
What is hypothecation loan
What is hypothecation
What is the difference between hypothecation and mortgage loan
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What is a hypothecation agreement?
Garima
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3 Year
2022-05-17T11:18:57+00:00 2022-06-01T12:37:15+00:00Comment
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