I am writing an essay on unsecured loans and am now trying to find some examples, so that I may then talk about the pros and cons for each example. I have already mentioned credit cards and an unsecured personal loans from a bank, and have described the pros and cons for both examples.

I wanted to also add tuition fee loans into the essay too, but the essay is limited to unsecured lending to retail consumers.

I want to add in unsecured loans in Auto financing too, but most pages I look into the topic discuss auto financing as simply a personal loan which is used primarily for purchasing vehicles.

I was hoping someone could give me an example or two of unsecured lending, and if it's not too much, could provide a resource which covers the example in more detail.

  • 10
    Me working for a month and hoping I get a pay check on day 30. Nov 6 '15 at 18:27
  • I took IOUs before.
    – Joshua
    Nov 6 '15 at 20:46

Unsecured loan is any loan that you don't provide an asset as a collateral for.

Auto loans are usually secured - by the auto. If you don't pay off the car, it will be repossessed.

Credit cards are a good example, personal/business loans are also usually unsecured, and you've pretty much covered it. Majority of loans, especially for large amounts, are usually given for a specific purpose (usually purchase of a large asset) and are secured.

  • 1
    Loan sharks with goons with baseball bats - is that considered a secured loan?
    – corsiKa
    Nov 6 '15 at 20:45
  • 2
    @corsiKa of course. It's secured by your knee-caps. On a more serious note - it's considered a "personal loan".
    – littleadv
    Nov 6 '15 at 23:25
  • @littleadv I thought it (loanshark) was considered a misdemeanor or felony. But it might vary by jurisdiction. :D
    – Mindwin
    Nov 17 '16 at 13:41

Some other unsecured loans that are common:

  • Student loans
  • Overdraft protection line of credit
  • Paycheck lenders
  • Medical bills
  • Bar tab
  • There are even some home improvement loans that do not require a lien. Nov 6 '15 at 21:11

Auto loans are secured agains the car.

"Signature" loans, from a bank that knows and trusts you, are typically unsecured.

Unsecured loans other than informal ones or these are fairly rare. Most lenders don't want to take the additional risk, or balance that risk with a high enough interest rate to make the unsecured loan unattractive.


Unsecured loans are loans that have not been “secured” with any kind of collateral. For example, the bank does not have the ability to take your property or automobile if you stop making payments on an unsecured loan.

These loans are sometimes referred “signature loans” due to the face your signature on the loan agreement is all that you deliver to the table.

Unsecured loans are available in a variety of flavors.

  1. Credit cards
  2. Student loans
  3. Personal loans

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