What is unsecured debt?
Unsecured debt is money that is borrowed but is not secured against any property. A person can borrow loans or take out credit using the unsecured debt method. Some banks and lenders ask the borrower to secure the loan amount against his or her house as collateral. This means that if you default on the loan payments, then ultimately the lender can sell your property in order to pay back the loan. Banks and lenders will give unsecured debt in most cases depending on how much money the borrower earns. However, with unsecured debt, the amount of interest placed on the money that is paid back can vary. If you have a bad credit rating, the lender can demand a much higher rate of interest on the loan. These high interest rates have been thought to attract people with bad credit ratings who may get stuck in a never-ending debt cycle. Many people will spend years paying back the high interest unsecured debt loans. The final repayment totals can add up to more than double or three times the amo
