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Secured vs. Unsecured Debt
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Flashcards
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Credit Card Debt
An unsecured debt that does not require collateral and often has high interest rates.
Student Loan (Federal)
An unsecured debt issued by the government to fund education, no collateral required.
Business Loan
Can be a secured or unsecured debt based on whether collateral is provided for the loan.
Tax Lien Certificate
A secured debt instrument issued by a government entity against a property owner who has not paid property taxes.
Rental Agreement Debt
An unsecured debt unless a security deposit is held as collateral.
Personal Loan
Can be a secured or unsecured debt, commonly used for personal expenses.
Bridge Loan
A short-term secured debt often used in real estate transactions.
Utility Bill Debt
Generally an unsecured debt as utilities service itself is not collateral.
Peer-to-Peer Loan
Can be secured or unsecured debt, dependent on the agreement between the borrower and the lender in the peer-to-peer network.
Pawn Loan
A short-term secured debt where personal property is used as collateral.
Secured Credit Card
A type of secured debt designed to build credit, requires a cash deposit as collateral.
Construction Loan
A short-term secured debt with the property under construction serving as collateral.
Bail Bond Loan
A secured debt where collateral is required to guarantee the appearance of the defendant in court.
Home Equity Loan
A secured debt where the borrower's equity in their home is used as collateral.
Car Loan
A secured debt with the purchased vehicle as collateral.
Medical Debt
An unsecured debt incurred due to healthcare expenses.
Payday Loan
A short-term, high-interest unsecured debt that is expected to be repaid with the borrower's next paycheck.
Unsecured Line of Credit
An unsecured debt that provides access to funds up to a certain limit without collateral.
Title Loan
A secured debt that requires vehicle ownership title as collateral.
Mortgage
A secured debt where the collateral is real estate property.
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