Unsecured loans are definitely risky for the lenders because if you fail to pay back your debt, they may have a hard time getting the money that is owed to them. This also explains why unsecured loans have higher interest rates than secured loans. As aforementioned, it is imperative to pay down secured debt first, however it is also vey important to get rid of unsecured debts. Unsecured debt lenders can get a legal judgment against the debtor if necessary. There is the possibility that they will not succeed in this, but if they do, a lien could be put on your home. This is not very common because it is tremendously difficult for lenders of unsecured debt to get their money back by making you sell your assets.