What is an Unsecured Loan?
An unsecured loan does NOT require collateral — just your signature and a means to pay back your loan. When you borrow money, the lender may or may not require you to pledge collateral to guarantee repayment of the debt. If collateral is pledged, then you have a secured loan. For secured loans, collateral can be anything of value, but collateral is NOT cash when it comes to loans — lenders do not require you to send cash as collateral or “insurance”. Did you know that your home’s equity is one of the best sources of cash? For homeowners, interest rates are often quite low. With equity, you can finance big-dollar expenses, such as car purchases, home remodeling, or medical expenses.
