2006-07-18 05:37:44 · 8 answers · asked by Nekeisha L 1 in Education & Reference ➔ Financial Aid
It means that you aren't required to have/list assets as a means of receiving the loan..... they approve it solely on credit rating.
2006-07-18 05:43:51 · answer #1 · answered by Frank 3 · 1⤊ 2⤋
That the loan is not "secured" by collateral. Collateral is real property - a house, car, computer - that can be confiscation (foreclosed on) by the lender if you do not pay back the loan. Basically, in a secured loan situation if you do not repay the loan the bank or lender can legally take the property you secured the loan with. You can also be reported to the credit bureau. Banks and lenders will usually offer slightly better interest rates and lend you more money if a loan is secured by real property.
An unsecured loan is made on the basis of your good name and credit. If you do not repay it, you will be reported to a credit bureau. These are riskier loans for banks and lenders, and so they are less willing to lend large sums unsecured, and may require a higher interest rate.
2006-07-18 05:44:03 · answer #2 · answered by Novice restauranteur 3 · 0⤊ 0⤋
Unsecured means you don't have to post any collateral. A secured loan, like a mortgage or a car loan, means that they can reposess (take) the house or the car if you don't pay the loan. Unsecured means all they can do is sue you, or maybe go after your wages or assets if you have any.
Unsecured loans have higher interest rates but you're not risking a specific asset.
2006-07-18 05:42:39 · answer #3 · answered by American citizen and taxpayer 7 · 0⤊ 0⤋
A "secured loan" has something tangible to back it up. One of the most common is a car loan. The bank or credit union that gives you the loan actually keeps title to the car (or shares title with you) until you pay off the loan, and if you don't make payments, they'll come take the car back, sell it and get their money anyway.
An "unsecured loan" is one not backed up by property. They give you the loan because they like you, or more realistically, they like your credit rating. Everything else being equal, unsecured loans tend to have higher interest rates because there's more risk for the lender.
2006-07-18 05:47:49 · answer #4 · answered by Berry K 4 · 0⤊ 0⤋
Means you're not borrowing against anything, like your car or your house. And the interest tends to be higher on unsecured loans because there is more for the bank to lose if you can't/won't pay up.
2006-07-18 05:42:03 · answer #5 · answered by my brain hurts 5 · 0⤊ 0⤋
It means the lender has nothing of value of yours to sell if you default (don't pay back) on your loan. It's called collateral, something you sign over to the bank in exchange for the loan. When you buy a car, the bank owns it until you've made the final payment, that's a collateralized loan.
2006-07-18 05:42:03 · answer #6 · answered by Fuggetaboutit_1 5 · 0⤊ 0⤋
It means an institution (like a credit card company) is loaning you money (or extending you credit) WITHOUT collateral like real property being put up to "secure" the loan.
This usually means much higher interest rates.
2006-07-18 05:43:12 · answer #7 · answered by chairman_of_the_bored_04 6 · 0⤊ 0⤋
You do not need to show any personal ownership for the loan.
http://www.salliemae.com ( For student loans)!!!!
http://www.iefa.org -------> International Students on the web <----
http://www.about.com --->Great search engine and information site for everything <---
http://www.ed.gov/index.jhtml --> Dept. of Education for any questions<--
http://www.fastweb.com
http://www.gocollege.com
http://www.collegeboard.com
http://www.scholarships.com
www.walmartfoundation.org
Please go to the Department of Education for more help and a list of student loan foundations.
2006-07-18 16:33:00 · answer #8 · answered by Anonymous · 0⤊ 0⤋
unsecured means you dont have to have collateral to get it ... your house or car would be collateral
2006-07-18 05:41:56 · answer #9 · answered by nurseholly_1971 2 · 0⤊ 0⤋
No collateral. In other words no assets to back you up in case you don not pay back such as your car or house.
2006-07-18 05:46:01 · answer #10 · answered by Irish 7 · 0⤊ 0⤋