Pledged asset obligations

Pledged asset obligations are basically installment loans, and mortgage loans are the most common. There are, however, other types of pledged asset obligations.

Often called secured credit, pledged asset debts are any credit accounts that require the borrower to pledge some asset as security for the credit or loan.

The mortgage lender will not consider the pledged assets against the applicant. Also, because these credit accounts are secured by other assets, most creditors do not analyze these accounts as stringently as consumer debts. However, mortgage lenders do place much weight on the applicant's history with pledged asset loans because of their similarity with mortgage loans.

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