Collateral-free loans

Collateral-free loans are debt agreements where the borrower does not need to provide assets, like property or valuables, as security for the loan. Lenders trust the borrower’s creditworthiness, income, or repayment ability instead. Because there's no physical asset backing the loan, they often come with higher interest rates or stricter eligibility criteria. These loans are common for personal expenses, small businesses, or individuals without valuable assets. Essentially, they rely on the borrower’s promise to repay, rather than securing the loan with collateral.