An unsecured debt is a loan that is not backed by collateral, such as a house or a car. This means that if the borrower defaults on the loan, the lender has no recourse but to sue the borrower for repayment.
Unsecured debts are often more expensive than secured debts because the lender is taking on more risk. The interest rates on unsecured debts are typically higher than the interest rates on secured debts. Unsecured debts can also be more difficult to obtain, as lenders will often require a higher credit score and a higher debt-to-income ratio to approve an unsecured loan.