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.


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.

  1. Creditor

    An entity (person or institution) that extends credit by giving ...
  2. Secured Debt

    Debt backed or secured by collateral to reduce the risk associated ...
  3. Unsecured Creditor

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

    A loan that is issued and supported only by the borrower's creditworthiness, ...
  5. Debtor

    A company or individual who owes money. If the debt is in the ...
  6. Bank Guarantee

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