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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