An unsecured loan is one where the borrower doesn't put up any collateral for the agreement of the funds. The borrower simply gives a word to pay back the loan to the money lender. In this case, the risk is higher for the lender, hence high interest rates are charged to the loan. They are also called signature loans as the client just signs documents to attest to it. These loans include medical bills, credit cards, and payday loan. Credit card corporations take clients general details such as name, address, employment information and social security number regarding the place of work and the total income. They analyze a client's credit report and evaluate the likelihood of his/her loan repayments thereafter consider the decision of loaning a certain sum of money. Characteristics of unsecured loans: Personal loan Singapore have only a short term pay back plan. They also require that the borrower's credentials are verified by the lender to establish if he/she is trustworthy before the funds can be payed out to him or her. These loans also require that the borrower have a regular income.. Advantages of Unsecured Loans: Unsecured Loans have less certification work hence faster approval times, and the money can be acquired faster. There is no risk of losing individual property incase of default on repayment of the loan as no collateral is required. They give full liberty over the utilization of the funds as lenders do not entail any limitations on them. This type of loans can also help one establish a positive credit history. Personal loan can help one improve his/her livelihood e.g. when he/she is planning to purchase a house, or start a business. Disadvantages of Unsecured Loans: The main disadvantage is that they usually have higher interest rates. This is depended on the borrower's credit history and hence limiting the amount of money one is willing to borrow.