Unsecured Loan

An Unsecured Loan is a loan that is not backed by property or any other form of collateral.  An unsecured loan is riskier to the lender because they do not have the ability to repossess or foreclose on a property.  This is one reason why the interest rate on an unsecured loan is higher.

The most common examples of unsecured loan are credit card debt or a student loan.  In this situation, the loan may be composed of credit card charges or higher education expenses that no longer have any tangible value - they cannot be sold by the lending institution.

An unsecured loan is one of the two most common forms of consumer loan, the other being a secured loan.

Other forms of this term include - unsecured loans