What Is An Unsecured Debt?
A. An Unsecured Debt generally arises out of a contract you enter into with a creditor that enables you to obtain goods or services on credit in exchange for your promise to pay that creditor back. The most common types of unsecured debt are credit cards and personal loans. If you fall behind on this type of debt, the only recourse the lender has is legal action.
An Unsecured Debt generally arises out of a contract you enter into with a creditor that enables you to obtain goods or services on credit in exchange for your promise to pay that creditor back. The most common types of unsecured debt are: credit cards, medical bills and personal loans. If you fall behind on this type of debt, the only recourse the lender has is legal action.
Unsecured debt is a debt that is not guaranteed by the pledge of any collateral. Most credit cards are unsecured debt, which is the main reason why their interest rate is higher than other forms of lending, such as mortgages, which employ property as collateral. Examples of unsecured debt are; credit cards, department store cards, unsecured personal loans, student loans, IRS, collection agencies, medical bills and some judgments.
