What is the term for pledging an asset as collateral to secure a loan without transferring title or ownership rights?

The correct term for pledging an asset as collateral to secure a loan while retaining ownership rights is hypothecation. This financial arrangement allows a borrower to use an asset, such as real estate or personal property, to secure a loan, but the borrower maintains ownership and the right to use the asset. In this context, hypothecation is essential as it provides a means for the lender to have a claim against the asset in the event that the borrower defaults on the loan, without taking physical possession or transferring ownership of the asset.

Collateralization refers more broadly to the process of using collateral to secure loans, but it doesn't specify the retention of ownership rights. A pledge agreement typically involves transferring possession of the asset as security, which differs from hypothecation since ownership is not retained in that scenario. A mortgage, while a method used to secure a loan for real property, involves transferring certain rights related to the property, specifically the lender's ability to foreclose if the borrower defaults, which isn't aligned with the concept of retaining ownership.

Thus, hypothecation best captures the idea of using an asset as collateral without transferring title or ownership rights.