A chattel mortgage is a type of loan that is secured by personal property, such as a car or a piece of equipment. The chattel mortgage gives the lender the right to seize the property if the borrower defaults on the loan.
In the context of securitisation, chattel mortgages can be used to securitise loans that are secured by personal property. This type of securitisation is known as a chattel backed securitisation.
Chattel backed securitisations are less common than mortgage backed securitisations, but they can be a good way to raise capital for businesses that need to finance the purchase of personal property.
Here are some examples of chattel mortgages in Australia:
- Car loans: Car loans are a common type of chattel mortgage. The car is used as collateral for the loan, and the lender can seize the car if the borrower defaults on the loan.
- Equipment loans: Equipment loans are also a common type of chattel mortgage. The equipment is used as collateral for the loan, and the lender can seize the equipment if the borrower defaults on the loan.