Why People Believe Unsecured Loans Imply No Risk?
The source of this belief seems to be the concepts of collateral, repossession and foreclosure. Since unsecured loans carry no collateral, there is no property to repossess or subject to foreclosure. Therefore, people seem to believe that there is nothing to be lost. Many think that if a property is not used as collateral, then, the lender cannot force its sell in a public auction. Moreover, people also neglect to remember that even if the lender had no action against the borrower to recover the money (and actually there are other legal actions), the damage that the lack of repayment of an unsecured loan can do to your credit score and history is just as appalling as that of secured loans. And just for that reason one should avoid missed payments and late payments.
