Unsecured Loan

Definition of "Unsecured loan"

loan that is not secured by a mortgage on a specific property. It is backed only by the borrower's credit rating. Unsecured loan are typically short term. The disadvantages of this kind of loan are that, because it is made for the short term and has no collateral, it carries a higher interest rate than a secured loan and payment in a lump sum is required.

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