What is the basis for decision-making on an unsecured loan?

The correct choice centers around creditworthiness as the primary basis for decision-making on an unsecured loan. Unsecured loans are loans not backed by collateral; therefore, lenders rely heavily on the borrower's creditworthiness to evaluate the risk of lending money.

Creditworthiness encompasses several factors, including credit history, credit score, income level, and overall financial behavior. A strong credit history indicates responsible borrowing and repayment behavior, which reassures lenders of the likelihood that the borrower will repay the loan on time. Conversely, a weak credit profile may lead to rejections or higher interest rates due to the perceived risk.

While information about employment status, current lines of credit, and any potential collateral may influence the decision, they do not hold as much weight as an individual's creditworthiness in the context of unsecured lending. With secured loans, collateral plays a significant role, but in the case of unsecured loans, the absence of this safety net shifts the lender's focus primarily to the borrower's ability and reliability to repay the loan.