Unsecured Loan depends on borrower creditworthiness

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Those loans which are not secured against an asset and are therefore available as home owner loans or tenant's loans are known as Unsecured loans.

These loans are issued and supported by the borrower's creditworthiness. They are also known as signature loans and are not backed by collateral.

Facts About Unsecured Loans:

These loans are available to tenants,council tenants,people in full time employment, part time employment, homeowners, housewives, househusbands, unemployed, retired, contract workers etc. Athough they may not appear as risk on one's asset, they in fact are as the debt and can be recovered through court proceedings.
These loans can be used for any purpose like to purchase a new car, to pay off your debts, for home improvements etc.
Commercial paper is an example of unsecured loans.

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