NONSECURED Meaning and
Definition
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"Nonsecured" is an adjective that refers to a state where there is a lack of security or collateral for a loan or debt. It describes a financial arrangement where the borrower or debtor has not provided any form of asset or property to guarantee the repayment of the borrowed amount. In such cases, the lender does not have any direct claim on specific property or assets in the event of default by the borrower.
A nonsecured loan, also known as an unsecured loan, is a credit facility extended by a financial institution or lender solely based on the borrower's creditworthiness and trustworthiness. Since there is no collateral involved, nonsecured loans typically involve higher interest rates than secured loans. Such loans require the borrower to have a good credit history, a stable income, and a reliable repayment capacity to qualify for the loan.
The concept of nonsecured can also be applied to other financial contexts, such as nonsecured credit cards, where there are no assets tied to the credit line. Nonsecured credit cards are usually available to individuals with limited or no credit history, enabling them to establish a credit profile.
Overall, "nonsecured" refers to a financial situation where there is no collateral or security provided by the borrower or debtor, leaving the lender relying solely on the borrower's trustworthiness and creditworthiness for repayment.
Etymology of NONSECURED
The word "nonsecured" is derived from combining the prefix "non-" and the word "secured".
The prefix "non-" is of Latin origin, meaning "not" or "without". It is commonly used in English to indicate negation or absence of something.
The word "secured" comes from the verb "secure", which originated from Old French "securer" and Latin "securus". It has roots in the Latin words "se-" (meaning "without") and "cura" (meaning "care").
When the prefix "non-" is added to "secured", it creates the word "nonsecured", which signifies the opposite or lack of security.
