Let's start with a simple life example. For example, if you need a lot of money to do business, and now your available asset is a small car.
Staking
This means that you need to physically hand over the car to the lender, such as a bank or lending institution. When the business improves, you can drive away after paying off the loan. If you can't repay your loan on time, the bank or lender can sell your car to recover the loan.
Mortgage
This means that the car is still under your control and can be used normally. When the business improves, the mortgage can be released after the loan is repaid. But if you fail to repay the loan, you will need to go through a complicated legal process and eventually lose your car.
The above example is relatively simple, but the actual situation is complex, and the core differences are as follows:
Ownership: The ownership of the assets in the pledge is in the lending institution. In the mortgage, although the assets are used as collateral for the loan, the borrower still has the ownership and full use of the assets.
Asset type: Pledges are generally movable assets that are convenient to move, such as **, bonds and **. A mortgage is usually a real property, such as a property or a vehicle.
Disposal PowersThe disposal of the pledged assets is relatively simple and straightforward, and the lender can directly ** the pledged assets to recover the loan without a court judgment. The process of mortgaging assets is more complicated and usually requires a series of legal procedures, including court judgments.
The advantages and disadvantages are also obvious according to different differences.
Staking
Pros: Fast access to funds, simplified procedures.
Disadvantages: Assets are unavailable, lender risk is high.
Mortgage
Advantages: Retention of title, controllable lender risk.
Disadvantages: Longer processing process and possible additional costs such as attorney fees and court costs.