An unsecured personal loan is a riskier loan than a secured personal loan so it may attract a slightly higher interest rate and is sometimes more challenging to obtain. A personal loan is considered “unsecure” because the assets you choose to purchase with it are not held as “security” or “collateral” if you fail to pay the loan. This could be a loan for a holiday, to consolidate debts, student loans and other small amounts where using a credit card isn’t appropriate.