An unsecured loan has no collateral attached. The lender's only recourse if you default is to send the debt to collections and report it to the credit bureaus. That higher risk is priced in through higher interest rates.
Common unsecured products
Almost all US personal loans, most credit cards, student loans (both federal and most private), and signature loans from credit unions. Buy-now-pay-later products are also unsecured.
What lenders look at
Credit score, payment history, debt-to-income ratio, income stability, and length of employment. Without collateral, your financial profile is the entire underwriting story.
Default consequences
Late payments hit your credit report within 30 days. Around 90–180 days the lender charges off the debt, sells it to a collection agency, and may sue for a judgment. A judgment can lead to wage garnishment in many states.
Frequently asked questions
Are unsecured loans harder to get?
For borrowers below a 670 FICO score, generally yes — and the rates are higher when you do qualify. Above 700, unsecured personal loans are typically easier to access than secured alternatives.