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Unsecured consumer loan – Is it just a port for money troubles?

Kirjoittanut: Kasperi Pitkänen - tiimistä Ei tiimiä.

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In this essay, we will take a look on consumer loans – especially in unsecured consumer loans. Unsecured consumer loan has good sides also, but rarely people think the bad sides of it. We will ball back and forth on ethical side in this topic, while explaining what it is and why it is risky for many people who doesn’t understand money.

What is unsecured consumer loan?

Is it fast way to happiness and will it balance your money problems?

When should you consider taking a consumer loan?

Consumer loan

Consumer loan is a loan given to consumers to finance specific types of expenditures. There are two types of consumer loans – secured consumer loans and unsecured consumer loans.

Secured consumer loans are backed by collateral. It means that there are assets that are used to cover the loan in the event that the borrower defaults (can’t pay the loan back on time what is in agreement).

Unsecured consumer loans are the opposite of secured consumer loans. They aren’t backed by collateral. It’s usually faster to get.

Why isn’t everybody then taking unsecured consumer loans, if it’s faster to take and doesn’t need collateral to back it up?

Let’s take a closer look on unsecured consumer loans.


Meanwhile unsecured consumer loan is faster to get, and it doesn’t need the collateral to back it up, it increases the risk for the lender. That’s why unsecured consumer loan are usually smaller amounts of money, they have shorter repayment periods, and they have higher charged interest rate. Even though the unsecured consumer loan is smaller amount of money, we are still talking about thousands to 50 thousand. When people are choosing between this those options – unsecured or secured consumer loan – usually the time is the answer. When you need the money fast, for example on car or paying other debt which have due date soon and higher interest rate is the unsecured consumer loan a great option. Often, it’s more easier to get if you are a normal human being with average salary without too many loans.

The risks

  • Easy to get in debt
  • High interest rates
  • Taking a loan for something that you don’t really need which cause debt in future
  • Taking too big loan when comparing it to your salary and income

Because of the high interest rates and the world situation it is not fast way to happiness or balance your money problems. It will increase your risk to get in personal debt if you won’t figure out what type of loan you’re taking. Because of the world situation, people are more concerned to use money or make big decision – for example buying house – which lead that people will not use as much money as before. That increase the risk of inflation which will affect on bank’s, and they will increase their loan interest rates. And that will show for individual customer on the amount of money that they have to pay overall back for bank. Therefore, the customer who have taken loan over their salary and can’t afford on loan interest raise – the shit will hit the fan – hard (Pitkänen, 2024).


Unsecured consumer loans are good for human who earns average salary and can optimize the money using in everyday life. They can plan and make smart choices with the loan money, and they will figure out every aspect of the risks of take it.

Personally, I wouldn’t recommended unsecured loan to anyone, but it can help you in the biggest need momentarily.


Chen, 2023. Unsecured Loans: Borrowing Without Collateral. Investopedia.com

Pitkänen, 2024.

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