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. Secured Debt

    Debt backed or secured by collateral to reduce the risk associated ...
  2. Secured Note

    A type of loan that is backed by the borrower's assets. If a ...
  3. Secured Bond

    A type of bond that is secured by the issuer's pledge of a specific ...
  4. Bank Guarantee

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

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

    A company or individual who owes money. If the debt is in the ...
Related Articles
  1. What Is A Corporate Credit Rating?
    Investing Basics

    What Is A Corporate Credit Rating?

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

    Are Structured Retail Products Too Good ...

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

    Lending Clubs: Better Than Banks?

  4. An Overview Of Corporate Bankruptcy
    Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center