Question

zachary graduated from college. he paid for much of his education with student loans. these loans are not backed by any specific asset. zachary’s student loans are an example of what type of loan?

• secured loan
• unsecured loan
• mortgage loan
• auto loan

Explanation:

To determine the type of loan, we analyze each option:

• A secured loan is backed by an asset (collateral). Zachary's student loans are not backed by any specific asset, so this is incorrect.
• An unsecured loan is not backed by collateral (a specific asset). Since Zachary's student loans have no specific asset backing them, this fits.
• A mortgage loan is a secured loan used to purchase real estate (backed by the property), which does not match Zachary's student loans.
• An auto loan is a secured loan used to purchase a vehicle (backed by the vehicle), which also does not match.

Answer:

B. unsecured loan