nonguaranteed

Nonguaranteed is an adjective used in finance to describe a financial obligation or asset that does not have a guarantee of repayment from a third party or collateral backing. In lending, nonguaranteed loans—often called unsecured loans—rely primarily on the borrower’s creditworthiness rather than assets pledged as security. Because there is no collateral, such loans typically carry higher interest rates, stricter qualification criteria, and terms that differ from secured loans.

In debt markets, nonguaranteed or unsecured debt refers to bonds or promissory notes that are not backed by a lien on specific assets. Debentures are a common form of unsecured debt in many jurisdictions. In insolvency, nonguaranteed creditors have lower priority than secured creditors, and among unsecured creditors, ranking can depend on terms such as seniority or subordinated status.

Practical examples include unsecured personal loans and most credit cards, as well as corporate bonds issued without collateral. The term can also appear in contract language to indicate that certain payments or benefits are not guaranteed by a third party, though in finance the focus is typically on debt obligations.

Because nonguaranteed obligations expose lenders to greater credit risk, they are priced with higher yields and may face more restrictive terms or underwriting requirements. The exact meaning and implications can vary by jurisdiction and by the specific contract language involved.