Unsecured Loan

Filed Under » ,
Dictionary Says

Definition of 'Unsecured Loan'

A loan that is issued and supported only by the borrower's creditworthiness, rather than by some sort of collateral.
Investopedia Says

Investopedia explains 'Unsecured Loan'

Generally, a borrower must have a high credit rating to receive an unsecured loan. Commercial paper is an example of an unsecured loan.

Related Definitions

  •

    Collateral

    Properties or assets that are offered to secure a loan or other credit. Collateral becomes subject to seizure on default.
    Read More »

  • Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on ...
    Read More »

  • Loan

    The act of giving money, property or other material goods to a another party in exchange for future repayment of the principal amount along with interest or other finance charges. A loan ...
    Read More »

    • Margin

      1. Borrowed money that is used to purchase securities. This practice is referred to as "buying on margin". 2. The amount of equity contributed by a customer as a percentage of the ...
      Read More »

    • Character Loan

      A character loan is a type of unsecured loan that is made on the basis of the borrower's reputation and credit. Borrowers are typically able to obtain only small loans by this method, ...
      Read More »

    • Loan Stock

      Common or preferred stock shares that are used as collateral to secure a loan from another party. The loan will earn a fixed interest rate, much like a standard loan, and can be secured ...
      Read More »

    • Signature Loan

      A type of personal loan offered by banks and other finance companies that uses only the borrower's signature and promise to pay as collateral.A signature loan can typically be used for ...
      Read More »

    • Five Cs Of Credit

      A method used by lenders to determine the credit worthiness of potential borrowers. The system weighs five characteristics of the borrower, attempting to gauge the chance of default. The ...
      Read More »

    • Commercial Loan

      A debt-based funding arrangement that a business can set up with a financial institution. The proceeds of commercial loans may be used to fund large capital expenditures and/or ...
      Read More »

    • Belt And Suspenders

      A term used to mean conservatism and safety in lending practices. Belt and suspenders has been used to describe cautious bankers who demand loan policies be very strictly adhered to. ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions