Unsecured Loan

An unsecured loan is money lent from one party to another without any collateral to secure its repayment. In most cases, these types of loans are considered somewhat high-risk, since the lender does not usually have any way of forcing the borrower to comply with the terms or make payments on time short of legal action. For this reason, most unsecured loans carry relatively high interest rates and are often only available to those with strong credit scores.
Unsecured loans are used primarily for small, short-term expenses. They are usually intended to be paid back within about a year, though the terms can vary depending on the amount at issue and the relationship between the lender and the borrower. When borrowers do not have a lot of valuable property, pursuing an unsecured loan may be one of their only ways of getting access to needed funds.

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