Unsecured debt refers to loans or credit that are not backed by any collateral, meaning there is no specific asset that the lender can claim if the borrower fails to repay. This type of debt typically carries a higher interest rate than secured debt because it poses a greater risk to lenders. In financial contexts, unsecured debt is often associated with consumer loans, credit cards, and certain types of bonds, making it a significant aspect of both long-term liabilities and overall financial management.
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