chattel mortgage
Chattel mortgage is an antiquated term for a mortgage on movable personal property (“chattel”), such as machinery or a vehicle (as opposed to real estate), where the lender holds an interest in the property as security / collateral for the loan . A property itself secures a loan in a traditional mortgage, while a lender would hold a lien against the movable personal property (“chattel”) until the loan is satisfied. In a chattel mortgage, such a lien exists as collateral for the loan, and a borrower gains full control of the movable personal property (“chattel”) until the loan is satisfied (see: Albany County Clerk. Chattel Mortgages, 1833-1904 ). When a borrower fails to pay a loan, then a chattel mortgage allows the corresponding lender to repossess and sell the movable personal property (“chattel”) to pay off the unpaid portion of the loan. Today these arrangements are referred to as " security agreements " and are governed by Article 9 of the Uniform Commercial Code .
[Last reviewed in February of 2025 by the Wex Definitions Team ]
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