Unsecured Credit Explained: What You Need to Know To Stay Compliant
In a recent article, we introduced the differences between secured and unsecured loans. A secured loan is one that is backed by an asset which serves as collateral, similar to a housing loan. In contrast, unsecured credit is not backed by any asset, and intrinsically poses a greater credit risk to the lender. To compensate lenders for this risk, borrowers of unsecured credit such as credit card debt are often subject to relatively higher interest rates on these loans. In