I can either take out a loan secured on my home ie. a mortgage, or an unsecured loan. Is an unsecured loan such that the lender cannot have any claim against your home? For example, if I borrow 25,000 and then default, does the lender have any claim on my home through the courts? In general, what types of loan are there which do not allow the lender to force my home to be sold, should I be unable to pay them back?
Unsecured loans
Feb 16, 2005
3 Replies
They cannot take your home directly but they can bankrupt you forcing you to sell it & pay off the debt
If you think you might be unable to pay back the loan, you probably should not take a loan.
For any loan or other debt, they could come and take assets, including your house. With an unsecured loan, they have to share the proceeds of the house after paying secured creditors with everyone else. A secured loan lets them get first (or second) call on the house.
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