Personal Loans
In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment.
In the event of the bankruptcy of the borrower, the unsecured creditors will have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors. The unsecured creditors will usually realize a smaller proportion of their claims than the secured creditors.
In some legal systems, unsecured creditors who are also indebted to the insolvent debtor are able (and in some jurisdictions, required) to set-off the debts, which actually puts the unsecured creditor with a matured liability to the debtor in a pre-preferential position.
Under risk-based pricing, creditors tend to demand extremely high interest rates as a condition of extending unsecured debt. The maximum loss on a properly collateralized loan is the difference between the fair market value of the collateral and the outstanding debt. Thus, in the context of secured lending, the use of collateral reduces the size of the “bet” taken by the creditor on the debtor’s creditworthiness. Without collateral, the creditor stands to lose the entire sum outstanding at the point of default, and must boost the interest rate to price in that risk. Where high interest rates are considered usurious, unsecured loans are either not made at all, or are made by loan sharks unafraid of the law.
Oftentimes Unsecured Loans are sought out in cases where additional capital is required although existing (but not necessarily all) assets have been pledged to secure prior debt. Secured lenders will more often than not include language in the loan agreement that prevents debtor from assuming additional secured loans or pledging any assets to a creditor.
Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others.[1] This commonly refers to a personal finance process of individuals addressing high consumer debt but occasionally refers to a country’s fiscal approach to corporate debt or Government debt.[2] The process can secure a lower overall interest rate to the entire debt load and provide the convenience of servicing only one loan.[3]
Lafayette
Lafayette (/ˌlæfiˈjɛt/; French: [lafajɛt]) is a city located along the Vermilion River in southwestern Louisiana. The city of Lafayette is the fourth-largest in the state, with a population of 127,657 according to 2015 U.S. Census estimates.[2] It is the principal city of the Lafayette, Louisiana Metropolitan Statistical Area, with a 2015 estimated population of 490,488. The larger trade area or Combined Statistical Area of Lafayette-Opelousas-Morgan City CSA was 627,146 in 2015.[2] Lafayette is the parish seat of Lafayette Parish, Louisiana.[3] Its nickname is The Hub City.
The American city was founded as Vermilionville in 1821 by Jean Mouton, a French-speaking man of Acadian descent. In 1884, it was renamed for General Lafayette, who fought with and significantly aided the American Army during the American Revolutionary War.[4] The city’s economy was primarily based on agriculture until the 1940s, when the petroleum and natural gas industries became dominant.
Lafayette is considered the center of Acadiana, the area of Cajun and Creole culture in Louisiana and the United States. It developed following the relocation of Acadians after their expulsion by the British from eastern Canada in the late 18th century following France’s defeat in the Seven Years’ War. There is also a strong Louisiana Creole influence in the area.[5]