---
title: "Loan Security Assignment"
space: "Lending"
url: "https://docs.frappe.io/lending/loan-security-assignment"
updated: "2026-01-06"
---

**Security or collateral assignment in loans** refers to the process by which a borrower pledges certain assets as security or collateral for a loan. In the event of default, the lender has the legal right to seize or sell the collateral to recover the outstanding loan amount. This assignment is a way for the lender to mitigate risk and ensure repayment, particularly in cases of secured loans.

Frappe lending allows users to assign multiple securities/collaterals against loans and enforce certain validations during the loan cycle.

To access the Loan Product, go to:


> **Home > Lending > Loan Security > Loan Security Assigment**
> 
> 

**1. Prerequisites**
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Before creating a Loan Security, it is advised to create the following:

* Loan Security

**2. How to create a Loan Security Assignment**
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1. Go to the Loan Security Assignment List, and click on Add Loan Security Assignment.
2. Select the loan account against which the security/collateral has to be pledged.
3. Add the Loan Security, add security price manually if Loan Security Price is not configured
4. Save and Submit.

![](/files/RcKN8aG.png)