Unsecured

AAA

DEFINITION of 'Unsecured'

A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge.

INVESTOPEDIA EXPLAINS 'Unsecured'

Unsecured transactions are the most risky for the lending or selling party and least risky for the borrowing or buying party. Lenders or sellers are provided no compensation for default of payment or failed delivery of goods or services.

RELATED TERMS
  1. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities ...
  2. Creditor

    An entity (person or institution) that extends credit by giving ...
  3. Debtor

    A company or individual who owes money. If the debt is in the ...
  4. Unsecured Creditor

    An individual or institution that lends money without obtaining ...
  5. Unsecured Loan

    A loan that is issued and supported only by the borrower's creditworthiness, ...
  6. Secured Debt

    Debt backed or secured by collateral to reduce the risk associated ...
Related Articles
  1. How do I start building a credit score?
    Credit & Loans

    How do I start building a credit score?

  2. What Is A Corporate Credit Rating?
    Investing Basics

    What Is A Corporate Credit Rating?

  3. Are Structured Retail Products Too Good ...
    Options & Futures

    Are Structured Retail Products Too Good ...

  4. Lending Clubs: Better Than Banks?
    Options & Futures

    Lending Clubs: Better Than Banks?

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center