Question

Why does an unsecured loan have a higher interest rate than a secured loan?

The bank bears all the risk of the loan.
The bank charges more for poor credit scores.
The bank bases higher interest rates on market conditions.
The bank raises rates unfairly for unsecured loans.

Answer 1

The banker has a set amount he or she can say yes it ok for the loan .
after that the banker has to ask the manager then the manger has to ask people higher up so what happens is in the bank when they have to get others opinions what happens is they share the cost of the loan if not payed back as a loss to both not just one

Answer 2

Your answer would most likely be A.) The bank bears all the risk of the loan.