What is the term for pledging property as security for a loan while maintaining possession of it?

The term for pledging property as security for a loan while retaining possession of it is "hypothecation." This process allows the borrower to continue using the asset in question while ensuring that the lender has a claim on it in the event of default. Hypothecation is common in various financing scenarios, such as when a homeowner takes out a mortgage on a property but continues to live in and use that property while making payments.

Mortgaging specifically refers to the agreement itself involving real estate, where the property serves as collateral, but the borrower is often required to maintain possession of the property under the general terms of the mortgage. Collateralization refers more broadly to the practice of securing loans with an asset but does not specifically emphasize retaining possession. Secured lending describes a broader category of loans that are secured with collateral but doesn't specifically focus on the aspect of maintaining possession while the loan is in effect. Hypothecation uniquely captures this duality of using property as collateral while still having the ability to maintain possession, making it the most accurate term.