What is an Unsecured Loan
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A loan made with no collateral posted to ensure
repayment. Variable cost. A cost that varies directly with sales, such
as raw materials, labor and sales commissions
An unsecured loan is not backed by collateral, and hence represents
greater risk to the lender. The lender may require a co-signer on the
loan to reduce their risk. If you default on the loan, the co-signer
will be held responsible for repayment. Most educational loans are
unsecured loans. In the case of federal student loans, the federal
government guarantees repayment of the loans. Other examples of
unsecured loans include credit card charges and personal lines of
credit.
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