Unsecured credit does not require any collateral to protect the payment of the debt.

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Unsecured credit is not backed by any asset or guarantee, which means that the lender relies solely on the borrower's creditworthiness and ability to repay the debt. As a result, unsecured credit typically comes with higher interest rates and stricter eligibility requirements compared to secured credit, which is backed by collateral.

Unsecured Credit Does Not Require Any Collateral to Protect the Payment