Typically, banks will want all their loans secure and backed by collateral to hedge them against defaulters. But not everyone can afford to back up their loan with an asset. Therefore, the tough economic times have also forced banks to adapt and be competitive by attending to all types of clients.
However, unlike secured loans, banks place limits on the maximum you can borrow. Also, these types of loans require a shorter repayment period, coupled with higher interest rates. Also, unsecured loans favor borrowers with higher credit scores and those with a cosigner.