zálog

The word "zálog" is a Hungarian term that translates to "pledge" or "pawn" in English. It refers to a type of security where a debtor delivers movable property to a creditor as collateral for a debt. If the debtor fails to repay the debt, the creditor has the right to sell the pledged item to satisfy the outstanding obligation. This practice is a form of secured lending that has historical roots and continues to be used in various financial contexts.

In the context of pawnbroking, "zálog" specifically refers to the item that is pawned. A pawnbroker lends money against the security of a personal possession, such as jewelry, electronics, or musical instruments. The borrower receives a loan and a pawn ticket, which details the terms of the loan and the item's description. If the borrower repays the loan with interest within a specified period, they can reclaim their property. If not, the pawnbroker is entitled to sell the item at auction or through other means to recover the loaned amount.

Beyond personal pawning, "zálog" can also encompass broader legal and financial arrangements. It might be used in agreements where businesses pledge assets as security for loans, or in situations involving collateral for contractual obligations. The core principle remains the same: providing tangible assets as a guarantee against financial commitment. The legal framework surrounding "zálog" typically defines the rights and responsibilities of both the debtor and the creditor, ensuring fairness and clarity in the transaction.