What is an unsecured loan?

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18th Nov 2009 by JonB

Security is used to describe what the lender has right to in case a loan is defaulted on or their collateral. For example, the security in a mortgage is a house. The security in a car loan is the car. An unsecured loan is with without any real collateral behind it. Examples of unsecured loans could be credit card loans, or simply a personal loan given to you by your bank. As you can imagine, unsecured loans typically have higher interest rates and less favorable terms than loans with security.

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17th Nov 2009 In Finance 1 Answers | 2325 Views
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