ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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has something of value the lender can take in case of default.
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has nothing of value the lender can take in case of default.
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is specifically for buying a house.
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None of the above
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Detailed explanation-1: -Unsecured loans present a high risk to lenders. Because there is no collateral to take as recourse if the borrower defaults on the loan, the lender has nothing of value to claim against, and cover their costs. Default happens when the debtor is unable to meet their legal obligations to pay a debt.
Detailed explanation-2: -What Happens with Unsecured Loans? If you didn’t put up any collateral for the loan, it is considered unsecured. If you’re behind on payments, the lender may begin adding fees and increasing the interest rate. If the lender considers a debt in default, the loan may be turned over to a collection agency.
Detailed explanation-3: -In an unsecured loan, a lender provides money to a borrower without any legal claim to the borrower’s assets in case of default. This means the lender has to depend solely on the borrower’s financial capacity and creditworthiness for repayment.
Detailed explanation-4: -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.
Detailed explanation-5: -The features and benefits of unsecured loans are: Both salaried and self-employed individuals can apply for unsecured loans. You can avail a loan amount of up to Rs. 25 lakhs.