asked 173k views
1 vote
Which type of debt is the least attractive for a consumer

A) Unsecured debt
B) Secured debt
C) Mortgage debt
D) Lease debt

asked
User Rolon
by
8.6k points

1 Answer

3 votes

Usually, unsecured debt is least attractive for consumers because it carries a higher interest rate than the others. In secured debt, including a mortgage, the lender has collateral that can help offset the cost of a loan if the consumer defaults; therefore it is less risky for the bank and they charge a lower rate. In an unsecured debt, like credit cards, the bank has no collateral to collect and the debt is more risky for them.

answered
User Mooing Duck
by
8.6k points
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