Unsecured Debt
/ˌʌnˈsʪkjʊrd dɛt/
Definitions
- (n.) A debt that is not backed by collateral, meaning the creditor has no security interest in specific property if the debtor defaults.
Credit cards typically represent unsecured debt since they are not tied to any asset.
Forms
- unsecured debt
- unsecured debts
Related terms
See also
Commentary
Unsecured debt carries higher risk for lenders and usually results in higher interest rates; clear differentiation from secured debt is essential in drafting loan documents.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.