Choose a country
United States
Select a city
Select a city
Select language
English
Select country
Choose a country
United States
Australia
Canada
España
México
Philippines
United States
Việt nam
Казахстан

Top Unsecured Loans in 2023: Your Guide to No-Collateral Lending

Unsecured loans
Explore the world of unsecured loans, a financial solution that doesn't require any collateral. This guide walks you through the top picks for 2023, giving you a comprehensive view of your options. Compare offerings from various lenders and understand how approval is primarily based on your credit score and finances. Remember, unsecured loans can be used for almost any purpose - whether you need to cover an unexpected expense or invest in a new venture.
Offers: 11
Updated:
19.11.2023
16:58
Best Quick Loan Today 06.12.2023*
Finanso
Need a Quick Loan Now?
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
100.00 – 2000.00 $
Rate
i

Effective interest rate on the product

0.05 – 2.50 %
Term
i

Loan term for the financial product

5 days – 3 months
Best Personal Loan Today 06.12.2023*
Finanso
Personal Loans
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
2000.00 – 100000.00 $
Rate
i

Effective interest rate on the product

6.34 – 35.89 %
Term
i

Loan term for the financial product

2 months – 72 months
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

4.144
Recommended FinScore™
0
300
650
1000
$500-$4,000
Rate
i

Effective interest rate on the product

up to 160%
Term
i

Loan term for the financial product

9-18 months
Submit One Loan Application Online!
Submit One Loan Application Online!

Use our quick loan matching system with a free credit check!

Rocket Loans
Personal Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

3.502
Recommended FinScore™
0
300
650
1000
2000.00 – 45000.00 $
Rate
i

Effective interest rate on the product

to 9.12 %
Term
i

Loan term for the financial product

30 months – 60 months
Apply
Ace Cash Express
Personal loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

3.578
(18 Ratings)
Recommended FinScore™
0
300
650
1000
$2000
Rate
i

Effective interest rate on the product

2.4% per day
Term
i

Loan term for the financial product

6 Months
Apply
Mariner Finance
Unexpected Expenses
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$1,000-$25,000
Rate
i

Effective interest rate on the product

up to 35.99%
Term
i

Loan term for the financial product

up to 60 months
SoFi
Personal loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

3.5
(12 Ratings)
Recommended FinScore™
0
300
650
1000
2000.00 – 99000.00 $
Rate
i

Effective interest rate on the product

8.99 – 25.81 %
Term
i

Loan term for the financial product

36 months – 72 months
Apply
ZocaLoans
Personal loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$200-$1,500
Rate
i

Effective interest rate on the product

up to 795%
Term
i

Loan term for the financial product

up to 90 days
Apply
Avant
Personal loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

3.3
Recommended FinScore™
0
300
650
1000
$2,000-$35,000
Rate
i

Effective interest rate on the product

up to 35.99%
Term
i

Loan term for the financial product

24-60 months
Apply
CreditNinja
Personal loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

3.32
(18 Ratings)
Recommended FinScore™
0
300
650
1000
$500-$5,000
Rate
i

Effective interest rate on the product

up to 16%
Term
i

Loan term for the financial product

up to 12 months
Apply
Unsecured Loans Calculator of December 2023

Your ideal unsecured loan with a free credit check in the US, just a few clicks away.

Loan amount
i

Select the desired loan amount

USD
USD
1000 $
100000 $
Loan term
i

Specify the loan term for the calculation

months
days
1
72
Interest rate
i

Choose the interest rate on the loan

5 %
30 %
Get Personal Loan Today 06.12.2023
Loan amount
i

Enter the desired loan amount

1000 $
30000 $
Loan amount
i

Enter the desired loan amount

1
18

You are able to pick a loan for free. You can receive money in: 15m

Get Personal Loan Today 06.12.2023
Your data is securely protected. Will not affect your Credit Score.
Loan amount
0 $
Loan term
0 months
Loan commission
i

Here is the average overpayment on a loan based on data from lenders in the USA.

430 $

By clicking on "Apply" button I give my consent to the processing of my personal data and agree with 404 Projects LP's Privacy Policy and Terms of Use, also familiar with all the documents posted on Finanso®.

More
Reviews
Makwa Finance
2.6
Makwa Finance is an online loan provider that operates in an exploitative manner, charging borrowers three times the amount they originally borrowed...
Review
CreditFresh
4.6
The customer service is exceptional, and the deposit process into my account is quick and straightforward. The approval process is easy and it came through at a time when I really needed it...
Review
Fig Loans
4.6
I appreciate the quick and easy process of obtaining a loan and the flexibility to adjust payment dates as needed...
Review
Amscot
4.2
I was very pleased with the service I received. It was my initial experience using this service, and I will definitely return when needed.
Review
Arrowhead Advance
2.2
Borrowing $750 at an interest rate exceeding 700% is absolutely not worthwhile, especially when you're faced with a repayment plan of $230 every two weeks...
Review
My Funding Choices
4.6
Obtaining a loan was quick and straightforward, which was especially appreciated during a time when, despite my reluctance to seek assistance, I genuinely needed it...
Review
Top Unsecured Loans in 2023: Your Guide to No-Collateral Lending

What are Unsecured Loans?

Unsecured loans are a suitable option when collateral is not required. These loans are granted based on the borrower's creditworthiness rather than assets used as collateral. However, obtaining approval for unsecured personal loans relies heavily on higher credit scores, as they pose a greater risk to lenders compared to secured loans. Borrowers are protected by laws against discriminatory lending practices. In some cases, a guarantor may be required if the borrower's credit score is insufficient.

There are various types of unsecured personal loans offered by lenders, each with its own benefits and considerations. The primary type is the signature loan, which relies solely on the borrower's signature without any collateral. These loans, provided by lending companies, banks, and credit unions, can be used for any purpose and feature fixed monthly payments with attractive interest rates. Another popular option is the personal line of credit, where borrowers have access to a predetermined amount approved by the bank and can borrow and repay as needed, with interest only on the utilized amount. Credit cards also serve as loans, allowing borrowers to utilize the credit limit provided. Peer-to-peer loans involve borrowing from individuals through online platforms, offering flexibility in interest rates and terms. Lastly, student loans are specifically designed to finance education, often offering flexible repayment options, interest subsidies, and other student-friendly features.

When considering unsecured personal loans, it is crucial to carefully assess each loan type to maximize benefits based on individual goals and loan details. Borrowers should consider their credit score, preferences, and the restrictions associated with the chosen lender. By understanding the options available, borrowers can make informed decisions and secure the most suitable unsecured loan for their needs.

Features

  1. You do not have to provide collateral. Unsecured loans do not require borrowers to provide collateral or assets as security.

  2. Creditworthiness-based approval. Approval for unsecured loans primarily depends on the borrower's creditworthiness, including factors like credit score and financial history.

  3. Higher risk for lenders. Due to the lack of collateral, unsecured loans carry a higher risk for lenders, resulting in potentially higher interest rates.

  4. Specific eligibility criteria. Unsecured loans often have specific requirements, such as minimum credit scores or income thresholds, that borrowers must meet to qualify.

  5. Flexibility in fund usage. Borrowers have the freedom to utilize unsecured loan funds for various purposes, such as debt consolidation, home improvements, or personal expenses.

Pros and Cons

Pros

  • No collateral required. Unsecured loans do not require borrowers to provide collateral, which makes them accessible to a wider range of individuals who may not have valuable assets to pledge.

  • Quick approval process. Unsecured loans typically have a faster approval process compared to secured loans, as there is no need for collateral evaluation.

  • Versatility. Borrowers have the freedom to use unsecured loan funds for various purposes, such as debt consolidation, home improvements, education, or personal expenses.

  • No risk to assets. Since no collateral is involved, borrowers do not risk losing their assets in the event of loan default.

Cons

  • Higher interest rates. An unsecured personal loan generally comes with higher interest rates compared to secured loans. This is due to the increased risk for lenders, as they have no collateral to recover their funds in case of default.

  • Stricter eligibility criteria. Lenders impose stricter eligibility requirements for unsecured loans, such as higher credit scores and income stability, to mitigate the risk associated with lending without collateral.

  • Limited loan amounts. Unsecured loans typically offer lower loan amounts compared to secured loans, as the absence of collateral makes lenders more cautious about extending larger sums.

  • Potential impact on credit. Defaulting on unsecured loans can have a negative impact on the borrower's credit score and credit history, making it more challenging to obtain loans or credit in the future.

How to get an Unsecured Loan

Applying for an unsecured loan is more straightforward than applying for a secured loan, and a borrower can fill it out online. However, follow these five steps to make sure that you make a good deal when applying for an unsecured loan.

  1. Check whether your credit report points correspond to the required amount for the loan you need. As the approval of the loan depends on the borrower's creditworthiness, the borrower's credit score must be from 610 to 640. Otherwise, they will not be able to apply for a personal loan. You can expect the most competitive rates if your FICO rating is at least 720. Before applying, checking your credit rating through free online services seems to be a beneficial idea.

  2. Give an honest estimate of your budget. Having studied your current income and expenses, you will understand how solvent you are. Keep in mind that late payments can negatively affect your credit score. In addition, lenders are interested in the borrower's debt-to-income (DTI) ratio.

  3.  Shop for creditors and pre-qualification. Study lenders' offers with the most competitive APR and flexible loan repayment terms. The online pre-qualification process will allow you, as a prospective borrower, to see what APR and loan terms are likely to be offered to you.

  4. Carefully collect all the necessary documentation. After studying the application process, start collecting the required documentation. Pre-prepared tax returns or a W-2 will speed up the application process, and the loan will be approved and financed faster.

  5. Write an official application and submit it. Fill out loan applications going online or in person. Approval and financing are often possible on the same or the next day. However, each lender decides the application process, and you may need to negotiate the details in person or by phone.

Requirements and Conditions

Requirements:

  • Creditworthiness. Lenders typically assess the borrower's credit score and credit history to evaluate their repayment capability and determine loan eligibility.

  • Income and employment stability. Lenders may require proof of steady income and employment to ensure the borrower has the means to repay the loan.

  • Debt-to-income ratio. Lenders may consider the borrower's existing debt obligations relative to their income to assess their ability to handle additional debt.

  • Age and residency. Borrowers are often required to be of legal age and residents of the country where the loan is being offered.

Conditions:

  • Loan amount and term. Unsecured loans have predefined loan amounts and repayment terms agreed upon by the borrower and lender.

  • Interest rates. The interest rates for unsecured loans can vary based on factors such as the borrower's creditworthiness, market conditions, and the lender's policies.

  • Repayment schedule. Lenders specify the repayment schedule, including the frequency and amount of payments, which can be monthly, bi-monthly, or based on other agreed-upon terms.

  • Late payment fees and penalties. Lenders may impose penalties or fees for late payments, which borrowers should be aware of to avoid additional costs.

  • Prepayment or early repayment options. Some lenders allow borrowers to make early repayments or pay off the loan in full before the scheduled term without incurring penalties.

  • Other terms and conditions. Lenders may have additional requirements, such as the provision of documentation, guarantors, or specific loan purposes, which borrowers should review before applying.

Best Places to get an Unsecured Loan

Apply for a loan

  1. Banks. Major banks, such as Wells Fargo, Bank of America, and Citibank, provide unsecured personal loans with a wide range of loan amounts and competitive interest rates.

  2. Credit unions. Local or community-based credit unions, like Navy Federal Credit Union or Alliant Credit Union, often offer unsecured loans with favorable terms and lower interest rates compared to traditional banks.

  3. Online lenders. Online lending platforms, such as SoFi, Marcus by Goldman Sachs, and LendingClub, offer convenient access to unsecured loans with streamlined application processes and competitive interest rates.

  4. Peer-to-peer lending platforms. Platforms like Prosper and Peerform connect borrowers with individual investors who fund their loans. These platforms provide unsecured loan options with various terms and rates.

  5. FinTech companies. Innovative financial technology companies like Avant and Upstart offer unsecured personal loans, leveraging data-driven algorithms to provide loans to individuals with diverse credit profiles.

  6. Credit card issuers. Credit card companies, including Chase, American Express, and Discover, offer credit cards with competitive interest rates and rewards programs, serving as a flexible form of unsecured borrowing.

Ways to Receive the Money

  1. Electronic Funds Transfer (EFT). The lender can transfer the loan amount directly into your bank account. This method allows you to access the funds and use them as needed quickly.

  2. Check or Draft. Some lenders may issue a physical check or draft for the loan amount. You can deposit or cash the check to obtain the funds.

  3. Prepaid Debit Card. Certain lenders offer the option of receiving the loan funds on a prepaid debit card. You can then use the card to make purchases or withdraw cash.

  4. Wire Transfer. In specific cases, lenders may offer wire transfers as a method to send the loan amount directly to your bank account. This option can be useful for accessing funds quickly.

  5. Cash Pickup. If available, you may have the option to pick up the loan funds in cash from a local branch or the lender's authorized agent. This method is suitable for individuals who prefer physical cash.

Things to Pay Attention to

  • Interest rates. Compare the interest rates offered by different lenders to ensure you secure the most favorable rate. A lower interest rate can significantly impact the overall cost of the loan.

  • Charges. Review the loan agreement for any hidden fees or charges, such as origination fees, late payment penalties, or prepayment penalties. Understanding these costs will help you assess the true affordability of the loan.

  • Repayment terms. Examine the repayment terms, including the duration of the loan and the frequency of payments (weekly, bi-weekly, monthly payment). Ensure they align with your financial situation and ability to make timely repayments.

  • Loan amount. Assess the loan amount offered by the lender and ensure it meets your borrowing needs. Avoid borrowing more than necessary to prevent overextending yourself financially.

  • Creditworthiness requirements. Understand the credit score and income requirements set by the lender. Check if you meet these criteria to increase your chances of loan approval.

  • Loan term flexibility: Some lenders offer flexibility in adjusting the loan term. Determine if the lender allows changes to the repayment schedule or offers options for early repayment without penalties.

  • Customer reviews and reputation. Research the lender's reputation by reading customer reviews and checking their credibility. Choose a reputable lender known for fair practices and excellent customer service.

  • Impact on credit score. Understand how taking on a loan may affect your credit score. On-time repayments can positively impact your credit, while defaults or late payments can harm your creditworthiness.

  • Loan purpose restrictions. Be aware of any restrictions on how you can use the loan funds. Ensure that the loan allows you to address your specific financial needs.

How to Repay an Unsecured Loan

  1. Review the repayment schedule. Carefully review the loan agreement to understand the repayment schedule, including the due dates and frequency of payments.

  2. Set up automatic payments. Consider setting up automatic payments through your bank account or online banking platform to ensure timely and consistent repayment. This helps avoid missed or late payments.

  3. Make payments on time. Making your loan payments on time is crucial to avoid late payment fees and negative impacts on your credit score. Set reminders or alerts to help you stay organized.

  4. Pay more than the minimum. Whenever possible, consider paying more than the minimum required payment. This can help reduce the overall interest paid and shorten the repayment period.

  5. Track your progress. Keep track of your loan balance and monitor your progress in repaying the loan. This helps you stay motivated and provides a clear view of your remaining repayment obligations.

  6. Avoid additional debt. During the loan repayment period, try to avoid taking on additional debt that may strain your financial situation or hinder your ability to repay the unsecured loan.

Alternatives

  1. Secured Loans. Unlike unsecured loans, secured loans require collateral, such as a home or a vehicle, to secure the loan. These loans typically offer lower interest rates and may be suitable if you have valuable assets to use as collateral.

  2. Home Equity Loans or Lines of Credit. If you own a home and have built up equity, you can consider tapping into it through a home equity loan or a home equity line of credit (HELOC). These loans use your home as collateral and offer competitive interest rates.

  3. Credit Cards. Credit cards can be an alternative to unsecured loans, providing a revolving line of credit. They offer flexibility in borrowing and repayment, but managing credit card debt responsibly is important to avoid high-interest charges.

  4. Peer-to-Peer Lending. Peer-to-peer lending platforms connect borrowers directly with individual investors who fund the loans. This alternative lending method often offers competitive rates and flexible terms.

Editorial Opinion

Unsecured loans have become a popular choice for individuals seeking financial flexibility without the burden of collateral. These loans offer borrowers the freedom to access funds for various purposes, whether it's consolidating debt, pursuing education, or covering unexpected expenses. The absence of collateral requirements streamlines the loan application process and enables quicker access to funds. However, it's crucial to approach unsecured loans with caution and make informed decisions.

One of the key advantages of unsecured loans is their flexibility. Borrowers have the freedom to use the loan amount at their discretion, providing them with financial autonomy. Furthermore, unsecured loans often come with fixed repayment terms, allowing borrowers to plan their budgets accordingly. This predictability enables better financial management and ensures borrowers stay on track with repayments.

While unsecured loans offer significant benefits, it is essential for borrowers to exercise responsibility and assess their financial capabilities. Higher interest rates are commonly associated with unsecured loans due to the increased risk for lenders. Therefore, borrowers must carefully consider their ability to repay the loan and factor in the additional interest expenses. Maintaining a good credit score and practicing diligent financial management can help secure more favorable loan terms.

In conclusion, unsecured loans provide a valuable financing solution for individuals who require flexibility and prompt access to funds. However, borrowers must approach them with a clear understanding of the terms, fees, and their financial capacity to ensure successful repayment. By exercising prudence and making informed decisions, unsecured loans can serve as an effective tool to achieve financial goals and navigate through various life circumstances.

FAQ

What type of loans are unsecured?

Unsecured loans encompass various types of borrowing options that do not require collateral. These loans are granted based on the borrower's creditworthiness rather than the presence of assets for security. Two common types of unsecured loans are personal loans and credit cards.

Personal loans are versatile unsecured loans that provide borrowers with a lump sum of money, typically with a fixed interest rate and repayment term. These loans can be used for a wide range of purposes, such as debt consolidation, home improvements, or covering unexpected expenses. Personal loans are usually approved based on the borrower's credit score, income stability, and overall financial history.

Credit cards are another popular form of unsecured borrowing. They provide borrowers with a revolving line of credit that can be used for purchases or cash advances. Credit cards offer flexibility in borrowing and repayment, allowing borrowers to make minimum payments or pay the balance in full each month. The credit limit on a credit card is determined based on the borrower's creditworthiness and is often adjustable over time.

Are unsecured loans risky?

An unsecured personal loan carries a certain level of risk for borrowers and lenders. The absence of collateral in unsecured loans increases the risk exposure for lenders compared to secured loans. However, the level of risk can vary depending on factors such as the borrower's creditworthiness, loan amount, and the lender's policies.

For borrowers, unsecured loans can pose risks if not managed responsibly. Since these loans typically have higher interest rates compared to secured loans, borrowers may face challenges in repaying the loan if they encounter financial difficulties or underestimate their repayment capacity. Defaulting on unsecured loans can negatively impact credit scores and lead to additional fees, penalties, or legal actions by the lender.

From the lender's perspective, unsecured loans carry a higher risk of default since there is no collateral to recover the funds in case of non-payment. Lenders assess borrowers' creditworthiness and establish eligibility criteria to mitigate this risk. They may also charge higher interest rates to compensate for the potential loss.

While unsecured loans have inherent risks, borrowers can minimize these risks by carefully evaluating their financial situation, choosing reputable lenders, and making timely repayments. Lenders, on the other hand, mitigate their risk through thorough credit assessments and setting appropriate interest rates. Ultimately, the level of risk associated with unsecured loans can be managed effectively by both borrowers and lenders through responsible financial practices and effective risk management strategies.

Is it better to have secured or unsecured debt?

Determining whether secured or unsecured debt is better depends on individual circumstances and financial goals. Both types of debt have their own advantages and considerations.

Secured debt, which is backed by collateral such as a home or a vehicle, often comes with lower interest rates compared to unsecured debt. This makes secured debt more appealing for borrowers seeking lower borrowing costs. Additionally, secured debt may offer higher borrowing limits, longer repayment terms, and potentially more favorable terms overall. It can be beneficial for individuals looking to make significant purchases, such as buying a home or financing a large project.

On the other hand, unsecured debt does not require collateral, providing flexibility and convenience for borrowers who may not have valuable assets to pledge. Unsecured debt is typically easier and quicker to obtain, as the loan approval process does not involve collateral evaluations. It may be a suitable choice for borrowers who need smaller loan amounts or those who want to consolidate higher-interest debts into one manageable payment.

Which type of debt is most often unsecured?

The most common type of debt that is unsecured is credit card debt. Credit cards are a prevalent form of unsecured borrowing where individuals can make purchases or obtain cash advances up to their credit limit. Unlike secured loans that require collateral, credit card debt is not backed by any specific asset.

Credit card debt is considered unsecured because the lender does not have a direct claim to any specific property or asset in case of non-payment. Instead, credit card issuers rely on the borrower's creditworthiness, income, and repayment history to determine the credit limit and interest rates for the cardholder. The flexibility and convenience of credit cards make them a popular choice for everyday transactions and short-term financing needs.

It is important to note that while credit card debt is a common example of unsecured debt, other types of unsecured loans, such as personal loans, student loans, and certain lines of credit, also fall into this category. The specific terms and conditions of these unsecured loans may vary based on the lender and the borrower's creditworthiness.

Do unsecured loans affect credit?

Yes, unsecured loans can have an impact on an individual's credit. The way an unsecured loan affects credit depends on how the borrower manages the loan and their repayment behavior.

When a borrower takes out an unsecured loan, such as a personal loan or a credit card, the lender typically reports the loan details and payment history to credit bureaus. This means that timely payments and responsible management of the loan can have a positive impact on the borrower's credit score.

Consistently making payments on time and in full demonstrates financial responsibility and can help improve or maintain a good credit score. It shows lenders and credit agencies that the borrower is reliable and capable of managing debt effectively.

On the other hand, if a borrower falls behind on payments, makes late payments, or defaults on the loan, it can have a negative impact on their credit score. Late payments or defaults can result in derogatory marks on the credit report, lower credit scores, and make it more challenging to obtain credit in the future.