Unsecured Debt...

[hardikvagadiya@gmail.com]

In finance, unsecured debt refers to any type of debt or general obligation that is not collateralised by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation. Unsecured loans are also known as signature loans or personal loans.
In the event of the bankruptcy of the borrower, the unsecured creditors will have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors, although the unsecured creditors will usually realize a smaller proportion of their claims than the secured creditors. These loans are often used by borrowers for small purchases such as computers, home improvements, vacations or unexpected expenses. I could find just these little information from net and want to know something more and interesting about Unsecured Debt so anybody help me to search information about the same topic ?
Thanks.

[Eugine]

The concept of unsecured debt is easily understood when its opposite is considered. A good example of secured debt would be a mortgage. The bank loans out money to a lender who uses it to buy a house; the house becomes the asset backing the loan.

[hardikvagadiya@gmail.com]

Originally Posted by Eugine

The concept of unsecured debt is easily understood when its opposite is considered. A good example of secured debt would be a mortgage. The bank loans out money to a lender who uses it to buy a house; the house becomes the asset backing the loan.

oh yeah Eugine,
You are right mortgage would be the best example of secured debt.

[Herry00]

Unsecured debt is a loan not secured by an underlying asset or collateral. Unsecured debt is the opposite of secured debt. A good example of secured debt would be a mortgage.