Unsecured Loan - Explained
What is an Unsecured Loan?
Written by J. Mance Gordon
Updated at April 19th, 2024
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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.
Related Topics
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- What is a Security Interest?
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- Pledge as Collateral
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Unsecured Loan Definition
- Unencumbered Asset
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- What are the benefits of security interests for creditors?
- Limited Recourse Debt
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Uniform Commercial Code - Article 9
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- Lien - Definition
- Blanket Lien Definition
- Unperfected Lien
- Possessory Lien
- Non-Possessory Lien
- Tax Lien
- Mechanics Lien Definition
- Construction Lien
- Cloud on Title
- What is the priority of a buyer of collateral that is subject to a security interest?
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- How does 9-320(b) protect consumers who purchase goods from other consumers?
- What is the Shelter Principle?
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- Subordination Agreement
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