Personal Loans - Unsecured Personal Loan
Credit cards, student loans, and personal loans are examples of unsecured loans. If a borrower defaults on an unsecured loan, the lender may commission a collection agency to collect the debt or take the borrower to court.
How do you qualify for an unsecured loan?
You can qualify for an unsecured loan by maintaining a decent credit score, borrowing history, and income. Fortunately, there are even unsecured loans that are designed to help borrowers with low credit scores. Unsecured loans are ones that don't require any collateral.
Common uses for unsecured personal loans
Most financial experts advise against borrowing for discretionary purposes, like weddings or vacations, for which there can be less expensive options. At the same time, some people prefer the fixed payments and terms associated with personal loans.
Debt consolidation involves combining debt from multiple sources into a single monthly payment, ideally at a lower interest rate. Using a personal loan to consolidate means one payment over a fixed period, giving you an end date to work toward.
Home improvements
A home improvement loan is a good idea if you don’t have a lot of equity in your home or want to avoid using your home to secure the loan. Unsecured home improvement loans typically have higher, fixed interest rates but shorter repayment terms than home equity loans and lines of credit.
Wedding
A personal loan for a wedding is a good option if you’re going to borrow anyway and can get a lower rate than you would on a credit card. Because you borrow a set amount, you’ll also avoid the temptation of overspending.
Boat
Some unsecured loans come with the benefits of online pre-qualification and fast funding. They also don’t require a down payment, but they can have higher rates since you’re not using collateral.
Medical expenses
Whether you’re looking to finance a dental, medical or cosmetic procedure, a personal loan can help with expenses not covered by insurance or savings. It can be an expensive way to finance health-related expenses, and you may have cheaper options, so shop around before you apply.
How much money can you borrow on an unsecured loan?
$1,000 to $400,000 Unsecured loans typically range from $1,000 to $400,000, which you can use for a range of purposes. In general, annual percentage rates (APRs) range from about 6% to 36%, and loan terms often extend from two to seven years.
What are unsecured loans examples? An unsecured loan is a facility to acquire loans using one's outstanding credit score, without pledging any collateral like a house or car. Personal loans, credit cards, student loans are some examples of uncollateralized loans.
Can I get a personal loan without collateral?
An unsecured personal loan lets you borrow money without having to pledge items you own as collateral. Unsecured loans do not require collateral, like a house or car, for approval. Instead, lenders issue these loans based on information about you, like your credit history, income and outstanding debts.