Answer :
An Unsecured Loan is a loan that does not require you to provide any collateral to avail them. It is issued to you by the lender on your creditworthiness as a borrower. And hence, having an excellent credit score is a prerequisite for the approval of an Unsecured Loan.
Secured loans demand that you pledge a valuable asset as collateral in the event that you are unable to repay the loan, whereas unsecured loans let you borrow the money in full (after the lender considers your financials). An asset of the borrower is subject to a legal claim by the lender in a secured loan. The lender may turn the assets into cash to be reimbursed if the borrower defaults. Collateral is the name given to the assets in a secured loan. The property you own will be used as collateral for the loan if the lender requests a secured guarantee. Your property may be seized by the lender if the borrower defaults. The fact that a loan or guarantee is unsecured does not prevent the lender from seizing your belongings.
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