Asked by Jociee Anallam on Jun 08, 2024
Verified
The key difference between secured and unsecured credit is that unsecured credit transactions are permissible only in a commercial context.
Secured Credit
A loan or credit extended where the borrower pledges some asset as collateral for the loan, providing the lender a measure of protection against the borrower's default.
Unsecured Credit
Credit that is issued and supported only by the borrower's creditworthiness, without any collateral.
Commercial Context
Refers to situations, activities, or transactions that are related to the commercial or business sector.
- Differentiate between secured and unsecured credit dealings.
- Understand the perils involved in differing credit transactions as observed by creditors.
Verified Answer
FS
Frank SchönherrJun 13, 2024
Final Answer :
False
Explanation :
The key difference between unsecured credit and secured credit is that with unsecured credit,services are rendered or money is loaned and the creditor gives up all rights to the goods or services in exchange for a promise to pay.With unsecured credit,the creditor can go against the security to collect the obligation.
Learning Objectives
- Differentiate between secured and unsecured credit dealings.
- Understand the perils involved in differing credit transactions as observed by creditors.