Unsecured Loan

A loan that is not backed by collateral is called an unsecured loan. The interest rate on an unsecured loan is usually higher than on a secured loan, such as a mortgage, because the lender is taking on more risk. An unsecured loan can be a good option if you don’t have any assets to use as collateral, or if you don’t want to put your assets at risk. However, you should be aware that you may pay a higher interest rate and that the lender may require a higher credit score than for a secured loan.