The word "Rahn" translates from Arabic to "pledge" or "collateral." This type of contract is used to secure the performance of obligations. In the context of Islamic finance, a borrower provides assets as collateral (pledged collateral) to guarantee the repayment of a debt. If the borrower fails to fulfill their obligations, the creditor has the right to sell the pledged assets and use the proceeds to repay the debt. If the proceeds from the sale of the assets exceed the amount of the debt, the excess is returned to the borrower. However, if the proceeds are insufficient to fully repay the debt, the remaining amount becomes an unsecured debt.