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Loans FAQ:

 

What is an unsecured loan?

  These are loans which is not secured against the assets of the borrower. The lender has no rights to the assets of the borrower in the event of the borrower defaulting on repayments of the loan.

  However, if the borrower does default, the lender may sue for repayment, which may in the end mean that the borrower must sell assets in order to repay the loan.

  Because the lender has no security, the interest rate (APR) charged will almost certainly be higher than for secured loans.



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