This research paper aims to dive deep into India's concept of unsecured loans. It seeks to find out what these loans are exactly, whether they are beneficial or predatory, and what factors lead to defaults. Furthermore, the paper aims to determine the factors deciding such loans' eligibilitys such as credit score, income, and age. The various informal sources of lending like moneylenders, landlords, and friends as well as the types of unsecured loans such as payday loans, signature loans, credit cards, etc are also explored. Bank policy when giving out credit as well as deciding how much risk these institutions can take, keeping in mind minimum liquidity requirements set by the Reserve Bank Of India is discussed. Additionally, a survey has been conducted to understand the demographic of people taking various types of loans, whether they prefer secured or unsecured credit, and the factors they consider before borrowing money. People were asked subjective questions such as what they feel are the risks of borrowing from a loan app or whether they feel that credit cards have high interest rates or not.