Unsecured Loan
An unsecured loan is not backed by collateral and relies on the borrower's creditworthiness. Lenders assess risk based on credit scores and income.
Unsecured loans often have higher interest rates than secured loans. Examples include personal loans and most credit cards.
Related Terms
Credit Score
A credit score is a numerical rating that represents a person's creditworthiness based on their cred...
Personal Loan
A personal loan is a fixed-term loan that is often unsecured and used for general purposes. Borrower...
Interest
Interest is the cost of borrowing money or the return earned on deposited funds, typically expressed...
Line of Credit
A line of credit is a type of revolving credit account that allows a borrower to draw funds up to a ...
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