Which of the following is true of unsecured credit?

Question

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Unsecured credit refers to loans or credit that does not have any collateral or security provided by the borrower to guarantee repayment of the debt. This means that the lender relies on the debtor's promise to repay the principal amount borrowed, and usually charges interest on the outstanding balance. If the debtor is unable to repay the debt, the lender may have to use legal means to collect the debt or write it off as a loss. Unsecured credit is therefore riskier for lenders and typically comes with higher interest rates and more stringent eligibility requirements for borrowers.

Which of the Following Is True of Unsecured Credit