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An unsecured personal loan lets you borrow funds without using an asset as security. This type of loan comes with an increased amount of flexibility in terms how you use your loan amount. You can use your funds to make a large purchase, improve your home, consolidate debt or just about anything else you like.
Keep in mind that for most personal loans, you’ll need a good credit score of 680 or higher to be approved.
Unsecured loans don’t require collateral. They can be used for just about any legitimate purpose, subject to the lender’s restrictions. When you apply for the loan, you may be asked to list why you are applying for it, and this could be part of the lender’s decision.
When completing your application, you’ll also need to list how much you want to borrow and choose your loan term. Unsecured personal loans offer varying amounts, usually between $1,000 and $50,000. Loan terms usually vary between one and seven years.
You’ll find that unsecured loans tend to come with higher rates than secured loans because the lender is taking on more risk. These loans can also come with establishment fees, monthly fees and annual fees, so be sure to check these before you apply.
Unsecured personal loans can have fixed or variable interest rates, and repayment restrictions differ between lenders – you may be able to make additional repayments and repay your loan early without penalty depending on your loan.
Interest rates on unsecured loans are usually higher for borrowers because the lender takes on more risk. If you default on the loan, you’ll have paid back more interest than on a secured loan. If your loan is secured the lender can take the asset you’ve used for collateral to recoup the outstanding amount.
Now that you’ve narrowed down what type of loan you’re getting, you’ll want to compare other features of the loan offer to make sure you’re getting the best deal.
Pros
Cons
If you think an unsecured personal loan is for you, you can use the comparison table above. After browsing through the table and finding a suitable loan, click the “Go to site” button to go to the lender’s website and start the application process.
Typically, to get an unsecured personal loan you’ll need to meet a range of eligibility criteria set by the lenders.
Imagine this scenario: Horace is planning his travels over the break before he returns to work as a school administrator. He loves the idea of vacationing overseas and decided to buy a boat. Since the prices for boats can be high, he looked into getting an unsecured personal loan.
Knowing he’ll be able to afford ongoing repayments on his current salary, Horace compared lenders offering loans for excellent credit scores. He checked the other eligibility criteria and then applied online. He found out he was approved soon after and made his way to the shore to enjoy the waters during the school break.
Picture: Shutterstock
The most qualified applicants have a minimum credit score of 680. Laurel Road tends to be best for people with annual income above $60,000 and total debt of less than 40% their income. If you don’t think Laurel Road is best for you, explore other loan options.
The most qualified applicants have a minimum credit score of 680. Laurel Road tends to be best for people with annual income above $60,000 and total debt of less than 40% their income. If you don’t think Laurel Road is best for you, explore other loan options.
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MY WIFE AND I HAVE A CHATER 7 DISCHARGE ON OUR CREDIT HISTORY CAN WE GET A LOAN
Hi Chris,
Thank you for reaching out to Finder.
Our bankruptcy loan page should be helpful in getting you started in searching for a loan available to users who are currently under bankruptcy. Check the tips and guides available on the page as well for reference. Hope this helps.
Cheers,
Reggie
I am looking for a (HIGH RISK) PENSION LOAN BROKER. Can you HELP ME?
Hi Shirley,
Thanks for getting in touch with finder.
I highly recommend you check our list of pension loan brokers.
On that page, you will see a table that allows you to conveniently compare personal loan matching services. Once you find the right one for you, click on the “Go to site” green button to learn more.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
How do I apply for a no credit history loan online?
Hi there!
Thank you for contacting Finder.
There are several ways to get a personal loan with no credit history such as applying for a loan with lenders that accept cosigners and specialized lenders.
However, if you don’t need the funds right away, consider building your credit score first to position yourself for stronger offers.
I hope this helps.
Cheers,
Danielle