Question posted in the General Law category relating to KwaZulu-Natal
Hello. Am a manager for Sbongisenis company, who has been loaning money every day and its been a week now plus its continuing to Mr Naidoo. Mr Naidoo gave Mr Mkhize a car lockbook as collateral. The amount is now mounting and Mr Mkhize is worried so he made Mr Naidoo both a security agreement and loan agreement to sign. Mr Naidoo want a loan of R15000 $1000 and till today has loaned half of the money plus interest. What can Mr Mkhize do to be on a safe side at the same time he still want to help Mr Naidoo since he claim he is in need lost a job, can Mr Mkhize hold the car also as collateral
Answer to the Question
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Yes he can, but the collateral in this instance would take the form of a "pledge", and in order for a pledge to be an effective form of collateral in SA, the pledged item (the car) needs to be delivered to Mr Mkhize. So that doesn't really help the owner of the car...
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