Which describes the difference between secured and unsecured credit? Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object. Unsecured credit is backed by an asset equal to the value of a loan, while secured credit is not guaranteed by a material object. Secured credit is risky because banks cannot seize assets, while unsecured credit is less risky because it is backed by material objects. Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.

Question

Mathematics

Lucia Travis

24 October, 13:05

Which describes the difference between secured and unsecured credit? Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object. Unsecured credit is backed by an asset equal to the value of a loan, while secured credit is not guaranteed by a material object. Secured credit is risky because banks cannot seize assets, while unsecured credit is less risky because it is backed by material objects. Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.

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Answers (2)

Know the Answer?

Fernanda Kelley · Answer 1

I'm not sure which is the answer but I do know it's NOT D. Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.

Andreas Austin · Answer 2

The correct answer is:

Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object.

Explanation:

If someone has poor credit, often a bank will offer them secured credit. If you have a secured credit account, this means that you have put up something for collateral. Banks do this so that if you default on the amount of credit, they can repossess the item you've put up to regain their money.