Unsecured loans

Unsecured loans are types of loans that do not require collateral, meaning they are not backed by an asset such as a car or a house. Instead, these loans are granted based on the borrower’s creditworthiness, which is evaluated through their credit score, income, and financial history. Because they are not secured by collateral, unsecured loans typically carry higher interest rates compared to secured loans to compensate for the higher risk to the lender. Common examples of unsecured loans include personal loans, credit card debt, and student loans