An unsecured loan is a type of the loan which is not backed by collateral, granted by the moneylenders after completing all authentic documented process. For the issuance of the unsecured loan, no collateral or security is involved. In other words, you may say, an unsecured loan is a good bank credit which is extended without any collateral. It means there is no need to place your valuable possessions against your loan as collateral. It is a set of specific arrangements in which the borrowers are unable to provide any security or collateral in exchange for the amount of money which the debtor is borrowing.