The adjective “pignorative” comes etymologically from the Latin “pignus” meaning pledge. Hence the indistinct usage of the adjective “pignorative” of Latin origin, or the more recent “pledge” to make reference, in both cases, to the credit or loan granted against the guarantee of a pledge or valuable asset, which is left in the hands of a credit entity, moneylender or pledge creditor to guarantee the fulfilment of the main obligation, namely, the cash loan or credit received by the borrower, accredited person or debtor.
The action or effect of receiving money as a loan against pledge guarantee is known as pignoration or pledge.
The pledge represents a real guarantee right which grants the credit entity or lender the possession of another person’s property, which is left in his care so that, should the debtor fail fulfil his obligation to pay the loan or credit upon its maturity, along with interest, the former may sell or auction the pledged item and thus satisfy the financial liabilities resulting from the non-payment of the loan.
