Unsecured Loans
- Definition: An unsecured loan is a type of loan where the borrower doesn't need to provide any collateral (such as property or assets) to secure the loan.
- Risk: Since there’s no collateral involved, the lender takes on more risk. This often results in higher interest rates compared to secured loans.
- Repayment: Repayment terms can vary, but unsecured loans generally have shorter repayment periods.
- Examples: Personal loans, credit cards, and payday loans.
- Eligibility: The lender primarily looks at your credit score, income, and ability to repay the loan.
- Loan Amounts: Loan amounts are generally lower than secured loans because the lender has no collateral to back the loan.