BREAKING DOWN ‘Unsecured Debt’ Unsecured debt can be personal or business debt. As a result of the high risk to the lender, unsecured debt tends to come with high interest rates, which increases the financial burden on the borrower. Credit card debt is the most widely-held unsecured debt. Other unsecured debts include student loans, payday loans, medical bills, and court-ordered child support. An unsecured debt is an obligation or debt that does not have specific property—like your house or car—serving as collateral for payment of the debt. If you fail to make payment on an unsecured debt, the creditor can’t take any of your property without first suing you and getting a court judgment (subject to a few exceptions). Unsecured debt is any debt that is not tied to an asset, like a home or automobile. This most commonly means credit card debt, but can also refer to items like personal loans and medical debt. Unsecured debt creates less stress and fewer problems for consumers because they don’t stand to lose an asset if they don’t repay the debt. After using your credit card responsibly for several months, you may be able to convert to an unsecured credit card. If approved, your credit card issuer will refund the security deposit to you. However, you should be aware, it can take 12 to 18 months to be considered for an unsecured credit card. Corporate Unsecured Debt – Since this type of debt result in reporting the delinquent debt to a credit reporting Credit card debt; Personal .
Talk with an ACCC’s certified credit advisor today to learn what is an unsecured credit card and how to get rid of debt What is ‘Credit Card Debt’ Credit card debt is a type of unsecured liability which is incurred through revolving credit card loans. Borrowers can accumulate credit card debt by opening numerous credit card accounts with varying terms and credit limits. All of a borrower’s credit card accounts will be reported and tracked by credit bureaus. However, unsecured debt, especially unsecured credit card debt, has no collateral to secure the loan. By definition, this makes unsecured credit cards a riskier proposition for lenders, and credit card users may need to pay higher interest and fees compared to other types of debt. Unsecured debt, such as a For example, say you have $2,000 of debt on a credit card with a 20% interest rate. If you pay $100 each month, .