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Definition of 'Unsecured Debt'
A loan not backed by an underlying asset. Unsecured debt includes credit card debt, medical bills, utility bills and any other type of loan or credit that was extended without a collateral requirement. It presents a high risk for lenders since they may have to sue to get the money they're owed if the borrower doesn't repay the full amount owed. As a result of this high risk, unsecured debt tends to come with a high interest rate. Unsecured debt can be wiped out by bankruptcy, but taking this dramatic step makes it more difficult to obtain financing for the next seven to 10 years.
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Investopedia explains 'Unsecured Debt'
Secured debt, on the other hand, is backed by an asset, also known as collateral. Under the terms of a secured loan, the lender can seize the collateral used to guarantee the loan if the borrower defaults. Examples of secured debt include mortgages, which are secured by houses, and auto loans, which are secured by cars. Because the borrower has more to lose by defaulting on a secured loan and the lender has something to gain, this type of loan will have a lower interest rate than an unsecured loan.
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Search results for 'Unsecured Debt'
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http://www.investopedia.com/exam-guide/series-7/debt-securities/corporate-bonds.asp
In this section Secured debt and unsecured debt. ... Collateral trust bonds. Unsecured
Debt Other bonds are unsecured and are known as debentures. ...
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http://www.investopedia.com/articles/pf/11/how-to-survive-bankruptcy.asp
... What it will do, however, is clear your unsecured debt. Unsecured debt is,
generally speaking, your bills credit card bills, medical ...
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http://www.investopedia.com/exam-guide/finra-series-6/investment-securities/corporate-bonds.asp
... Unsecured Debt: Unsecured bonds, also known as debentures, are secured only by the
corporation's good faith and credit, and not by a specific asset. ...
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http://www.investopedia.com/ask/answers/08/bankruptcy-abuse-prevention-act.asp
... In the first means test, a debtor's finances are measured to determine whether
or not he or she can repay 25% of outstanding unsecured debt. ...
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http://www.investopedia.com/articles/bonds/08/credit-risk-exchange-traded-note.asp
... these securities. Differences ETNs differ from ETFs in the following four
ways: 1. ETNs are structured as unsecured debt. Investors ...
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http://www.investopedia.com/articles/pf/08/consolidate-debt.asp
... Debt: According to Vaz-Oxlade, "if you have debt and equity, you should refinance."
This means that you take your unsecured debt (from credit cards or personal ...
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http://www.investopedia.com/articles/pf/08/medical-debt.asp
... Medical debt is unsecured debt, whereas a home equity loan is considered secured
debt - it's backed by collateral or a security, in this case your home. ...
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http://www.investopedia.com/articles/pf/07/credit-debt-options.asp
... There are many risks involved with loan consolidation (such as the decision to move
from unsecured debt to a debt that is secured with collateral). ...
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http://www.investopedia.com/slide-show/top-5-reasons-why-people-go-bankrupt/too-much-debt.aspx
... Although home-equity loans can be a good remedy for unsecured debt in some cases,
once it is exhausted, irresponsible borrowers can face foreclosure on their ...
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http://www.investopedia.com/articles/pf/06/MortIntTaxDeduct.asp
... for the debt. If it is unsecured debt, it is considered a personal loan,
and the interest on it is not deductible. The Definition ...
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