Unsecured Loan - Explained
What is an Unsecured Loan?
Written by Jason Gordon
Updated at April 6th, 2023
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What is an Unsecured Loan?
An unsecured loan is a loan issued without any collateral or guarantor. Unlike a secured loan, an unsecured loan is issued without any protection or collateralization.
Contrary to a secured loan, unsecured loans are generally only available to borrowers with high credit ratings and creditworthiness. Unsecured loans pose higher risk to lenders - so, these loans have higher interest rates. Credit cards, personal loans, business loans and student loans are good examples of unsecured loans.
Back To: COMMERCIAL LAW: CONTRACTS, PAYMENTS, SECURITY INTERESTS, & BANKRUPTCY
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