Unsecured Loan

An unsecured loan is a type of loan that doesn’t require you to provide collateral, like a house or car, to secure it. Instead, lending institutions rely on your creditworthiness and promise to repay based on your financial history and ability to pay. Because it’s riskier for the lender, unsecured loans often have higher interest rates. Common examples include personal loans and credit cards. While you don’t risk losing specific assets if you don’t repay, non-payment can harm your credit score and lead to collection efforts.