
Unsecured loans are loans where lenders don’t require collateral for approval. They are different from secured loans, which require collateral (like a car or a house) that the lender can repossess if you fail to make repayments. Unsecured loans are based on your financial history, including credit history, current debts, and income.Â
Interest rates for an unsecured personal loan may range from 6% to 36%, though the Federal Reserve reports that the average personal loan interest rate is 17%.
Who Offers Unsecured Personal Loans?
There are a few places to apply for an unsecured personal loan, though you should consider the pros and cons of each before making a decision.Â
Banks
Banks offer unsecured personal loans and might be a good option if you already have a good relationship with your bank. If your accounts are in good standing, you may be able to get a bigger loan or better interest rates. There are some drawbacks as banks typically only accept borrowers that have good credit scores and may not offer pre-qualification. Â
Online Lenders
Unlike some banks, many online lenders offer pre-qualification. This allows you to submit some personal information to get a preview of a loan you may qualify for, including the loan amount and terms. With pre-qualification, online lenders run a soft credit check that doesn’t affect your credit score.Â
Online lenders are often the fastest way to get a loan as you apply online and often get a decision on the same day. They may also directly deposit the loan amount to your account.Â
Credit Unions
If you have less-than-great credit, a credit union may be the option with the best rates since federal credit unions cap APRs at 18%. Like banks, credit unions do not offer the option to pre-qualify, so shopping around for the best loans can be a hassle.Â
Credit unions only extend loans to members and membership qualifications differ from credit union to credit union. Some require you to live in a particular area or be a part of a special group that the credit union works with.Â
How Do I Qualify for an Unsecured Personal Loan?
Depending on where you apply for a personal loan, several different factors may come into play. Some lenders focus solely on your credit score, offering the best rates and largest loan amounts to those with excellent credit scores.Â
Other lenders may also look at your credit history and only extend loans to those with a minimum credit history length (usually two years). Those with longer credit histories may be able to access better terms.
Lenders also consider your debt-to-income (DTI) ratio to see if you already carry a lot of debt. This ratio compares your monthly debt payments to your monthly income. Those that are already carrying a lot of debt may appear riskier to lenders who might think you will have a hard time paying back their loan. The ideal range for DTI is under 40%.Â
Once you have a good idea of which type of lender may be best for you, be sure that your financial information is in order. If you have at least two years of credit history and a good credit score, you should be able to qualify for an unsecured personal loan with good rates.Â
Yes I am Debra Scott I was wondering how do I get the loan your talking about y’all email me and said you have a loan for me
Hello Debra,
You are welcomed to apply for a short term loan by visiting one of our network partners at Sydney-Financial or Cedar Creek Financial.
Also, we thought these articles might help you understand your options: The Comprehensive Guide to Personal Loans and 4 Reasons You Might Need A Personal Loan.
Hope these help,
The AssessmentOption Team
Very helpful and informative, THANKS!!
Thank You for taking the time to contact us, Timothy!
Hearing positive feedback pushes us to continue publishing quality information with each and every blog posted.
We hope you have a great weekend,
The AssessmentOption Team
Yes I just want to correct y’all on something y’all said it’s time for me to get my second loan y’all never gave me a first one y’all said it’s been a while it’s been about 2 weeks or so from my first loan no y’all never gave me a first loan so I would like to get that straight y’all have not gave me no type of money so we have an understanding on this this will be my first time if I agree to do it or if it sound in my original price to start paying back it once we decide so just send me a email letting me know what I have to do thank you and have a blessed day
Debra,
In our previous response, we mentioned a few resources we think would be helpful for you. Please review those or our other articles at AssessmentOption.
Have a great day,
The AssessmentOption Team
This is very good info.thanks
Good day, Wiley! We wanted to say Thank You for taking the time to contact us.
Hearing positive feedback pushes us to continue publishing quality information with each and every blog posted.
We hope you have a great week,
The AssessmentOption Team
I’m really needing a loan me and my family are about to lose everything car house lights everything so please help us
Hello Micheal,
For immediate loan consideration, please visit one of our network partners at Quick Loans or Loan Assist, to see if you qualify for short term funding.
To help you understand options that may be offered to you, please consider reading Which is Better: Personal Loan vs. Line of Credit and also, 5 Ways to Borrow Money.
Sending extra luck your way,
The AssessmentOption Team
I am the owner of a dole proprietorship and was awarded a ppp loan that was to be a godsend and help keep my livelihood afloat for my family and I. Unfortunately due to my own unfamiliarity with the process while I was approved and then funds were sent to my personal online bank account (dave), but due to the fact that it is indeed a personal account and not a business account my online bank rejected the funds and sent them back to the lender. Now my son’s wow are set aside and approved I am currently in a state of limbo with an unknown timeframe as to win I will finally receive my money that I so desperately need to stay afloat and I’m less than two weeks away from shutting down. Unfortunately there is no end in sight as I have been waiting and have met dead end after dead end for over 2 months. My credit is below average and pretty much out of all options as I have already burned through all my assets trying to stay afloat. Is there anything that I can do maybe take out a loan against the loan that I am awaiting from the SBA which I already have been given a loan number for?
John, that is a tough scenario to work through, but hopefully, the following resources may be of some help:
For short term loan options, please visit: Quick Loans, Loan Assist USA, or Lions Gate Loans.
For additional information on what may be available to you, please visit: The Comprehensive Guide to Personal Loans, Which is Better: Personal Loan vs Line of Credit, or Can I Get A Personal Loan If I’m Self Employed.
Best wishes for a quick resolution,
The AssessmentOption Team
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Buy several different types of products and sell as they rise in value and reinvest with three low risk stocks and sell them after moderate gains.
Jackie, thank you for your suggestion.
Keep checking the Assessment Option blog page and see if we turned it into a post that we can share with others!
Make it a great week,
The AssessmentOption Team
Is it generally more difficult to get an unsecured loan for a major restorative dental procedure versus say a wedding or automobile?
Hello Steven, That’s a great question and likely at the discretion of the lender. However, this blog might help shed some light: The Comprehensive Guide to Personal Loans. Another good resource of information might be found in the blog, Which is Better: Personal Loan vs Line of Credit.
Hope these resources help,
The AssessmentOption Team
How do I get a personal loan with poor credit and no bank account? Looking for a small loan of $300-$500.
Hi Jennifer. We have an article that covers this topic here: https://www.assessmentoption.com/how-to-get-a-personal-loan-with-bad-credit/
If you need an option to try, give our friends at Oakwood Financial a try.