 TITLE: Secured vs. Unsecured Loans: What You Need to Know CONTENT: What Happens if You Default on an Unsecured Loan?\n-------------------------------------------------\nFailing to repay any debt will have a negative effect on your credit. Although you don't have to worry about losing your collateral with an unsecured loan, the cascading effects of falling behind in your payments can do real damage to your credit—and your finances.\nLate payments made 30 days or more past the due date will lower your credit score and remain on your credit report for seven years. If a lender puts your account into collections or takes legal action against you, this information also becomes part of your credit history. Collections and civil judgments remain on your credit report for seven years from the date the account first went delinquent or from the date a ruling was made against you. Serious delinquencies are a red flag to future lenders, who will think twice before extending credit to you. END