An unsecured line of credit is a flexible borrowing option that allows individuals or businesses to access funds without needing to provide collateral, such as a house or car. This means that lenders evaluate the borrower's creditworthiness based on their credit score and financial history rather than securing the loan with an asset. Borrowers can withdraw money up to a predetermined limit and only pay interest on the amount they use. This type of credit is often used for unexpected expenses or to manage cash flow, making it a convenient financial tool for those who qualify.