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Unsecured Personal Loans: Borrow With No Collateral

Unsecured loans don’t require collateral and can be used for just about any purpose. Compare loans from multiple lenders that offer unsecured personal loans.

By Annie Millerbernd and  Jackie Veling 

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An unsecured loan is a loan that doesn’t require you to pledge an asset, such as a house or car, as collateral. Instead, approval is based primarily on your credit score and finances.

Unsecured loans can be used for almost any purpose. If you’re considering an unsecured personal loan, compare potentially cheaper options, and make sure the monthly payments don’t stress your budget.

Why trust NerdWallet? The personal loans editorial team at NerdWallet has objectively reviewed and compared more than 35 financial institutions to find the best unsecured personal loans. Our picks feature a variety of loan purposes, loan amounts and credit requirements. See our full methodology at the bottom of this page.

Featured partners for Personal Loans

Unsecured Personal Loans: Borrow With No Collateral

Our pick for

Home improvement loans

These lenders offer low rates for borrowers looking to make home renovations.

Lightstream
Get rate

on LightStream's website

LightStream

5.0

NerdWallet rating 
Lightstream

Est. APR

6.99-23.99%

Loan amount

$5,000-$100,000

Min. credit score

660
Get rate

on LightStream's website

SoFi
Get rate

on SoFi's website

SoFi

5.0

NerdWallet rating 
SoFi

Est. APR

8.99-23.43%

Loan amount

$5,000-$100,000

Min. credit score

None
Get rate

on SoFi's website

RocketLoans
Get rate

on Rocket Loans' website

Rocket Loans

4.5

NerdWallet rating 
RocketLoans

Est. APR

7.73-29.99%

Loan amount

$2,000-$45,000

Min. credit score

640
Get rate

on Rocket Loans' website

Our pick for

Debt consolidation loans

These lenders offer consumer-friendly features for those looking to combine debts.

Achieve
Get rate

on Achieve's website

Achieve Personal Loans

5.0

NerdWallet rating 
Achieve

Est. APR

7.99-35.99%

Loan amount

$5,000-$50,000

Min. credit score

620
Get rate

on Achieve's website

Discover
Get rate

on Discover's website

Discover® Personal Loans

5.0

NerdWallet rating 
Discover

Est. APR

6.99-24.99%

Loan amount

$2,500-$40,000

Min. credit score

660
Get rate

on Discover's website

Happy Money
Get rate

on Happy Money's website

Happy Money

4.5

NerdWallet rating 
Happy Money

Est. APR

10.50-29.99%

Loan amount

$5,000-$40,000

Min. credit score

640
Get rate

on Happy Money's website

Our pick for

Medical loans

An unsecured loan from these lenders can be used for dental, cosmetic and medical procedures.

BestEgg
Get rate

on Best Egg's website

Best Egg

4.5

NerdWallet rating 
BestEgg

Est. APR

8.99-35.99%

Loan amount

$2,000-$50,000

Min. credit score

600
Get rate

on Best Egg's website

Upstart
Get rate

on Upstart's website

Upstart

4.5

NerdWallet rating 
Upstart

Est. APR

6.50-35.99%

Loan amount

$1,000-$50,000

Min. credit score

None
Get rate

on Upstart's website

Our pick for

Wedding loans

An unsecured loan from one of these lenders can help cover the cost of a wedding.

Lending Club
Get rate

on LendingClub's website

LendingClub

5.0

NerdWallet rating 
Lending Club

Est. APR

8.30-36.00%

Loan amount

$1,000-$40,000

Min. credit score

600
Get rate

on LendingClub's website

Laurel Road Personal Loan
See my rates

on NerdWallet's secure website

Laurel Road Personal Loan

5.0

NerdWallet rating 
Laurel Road Personal Loan

Est. APR

8.99-24.25%

Loan amount

$5,000-$45,000

Min. credit score

660
See my rates

on NerdWallet's secure website

Our pick for

Boat loans

These lenders offer a wide range of loan amounts and terms to help finance a boat purchase.

PenFed Credit Union Personal Loan
See my rates

on NerdWallet's secure website

PenFed Credit Union Personal Loan

5.0

NerdWallet rating 
PenFed Credit Union Personal Loan

Est. APR

7.74-17.99%

Loan amount

$600-$50,000

Min. credit score

700
See my rates

on NerdWallet's secure website

Prosper
See my rates

on NerdWallet's secure website

Prosper

4.5

NerdWallet rating 
Prosper

Est. APR

6.99-35.99%

Loan amount

$2,000-$50,000

Min. credit score

560
See my rates

on NerdWallet's secure website

U.S. Bank Personal Loan
See my rates

on NerdWallet's secure website

U.S. Bank Personal Loan

4.5

NerdWallet rating 
U.S. Bank Personal Loan

Est. APR

8.99-21.49%

Loan amount

$1,000-$25,000

Min. credit score

680
See my rates

on NerdWallet's secure website

Our pick for

Bad credit loans

These lenders offer unsecured personal loans to borrowers with low credit scores.

Upgrade
Get rate

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Est. APR

8.24-35.97%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Upgrade's website

Universal Credit
Get rate

on Universal Credit's website

Universal Credit

4.5

NerdWallet rating 
Universal Credit

Est. APR

11.69-35.93%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Universal Credit's website

What is an unsecured personal loan?

An unsecured personal loan is a loan from an online lender, bank or credit union that doesn’t require collateral to guarantee the loan. Loan amounts range from $1,000 to $100,000 and are paid back monthly in terms ranging from two to seven years.

The best use of an unsecured loan is one that improves your finances. This could mean getting a loan for debt consolidation, which can reduce your debt and help you pay it off faster, or for a home improvement project, which can increase the value of your home.

What is the difference between secured and unsecured loans?

A secured loan requires you to offer collateral as part of the loan agreement. Examples of collateral include your car, house, or a savings or retirement account.

Since secured loans are backed by an asset, borrowers who have lower credit scores may qualify for a better interest rate or higher loan amount compared with an unsecured loan. But there’s a catch — if you fail to repay a secured loan, the lender can seize your collateral.

With an unsecured loan, you don’t risk collateral, but it may be harder to qualify. Lenders look at credit score, credit history, income and existing debt when deciding whether to approve you.

Pros and cons of secured and unsecured loans

Pros

Cons

Secured loans

  • If you have a low credit score, you may have an easier time qualifying compared to an unsecured loan.

  • If you fail to repay the loan, the lender can seize the collateral.

Unsecured loans

  • No collateral is required, so you won’t risk losing an asset.

  • You’ll need a strong credit score and solid finances to get the best offer.

How do unsecured loans work?

To get an unsecured loan, you’ll need to apply with a bank, credit union or online lender that offers personal loans.

If you’re approved, you’ll receive the money in a lump sum in your account. You’ll then repay the loan in monthly installments spread out over a set repayment term.

Monthly payments are typically fixed, meaning they won’t change over the life of the loan.

What is the interest rate on an unsecured personal loan?

The interest rate on an unsecured personal loan typically ranges from 6% to 36%. It’s expressed as an annual percentage rate, or APR, and includes interest and any fees associated with the loan.

For example, if you apply for a $7,000 unsecured personal loan at 15.5% APR and choose a two-year repayment term, you’ll make monthly payments of $341. The loan will cost $1,186 in total interest.

Here’s a look at average personal loan interest rates, based on your credit bracket.

How's your credit?

Score range

Estimated APR

Excellent

720-850.

11.3%.

Good

690-719.

15.6%.

Fair

630-689.

22.3%.

Bad

300-629.

25.2%.

Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace from July 1, 2022, to Oct. 31, 2022. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below a 500 credit score — are unlikely to qualify. Information in this table applies only to lenders with APRs below 36%.

Common uses for unsecured personal loans

Though an unsecured personal loan can be used for almost any purpose, NerdWallet recommends using one when it can improve your finances. Debt consolidation and home improvement are two common examples.

Unsecured personal loans for debt consolidation

Debt consolidation involves combining debt from multiple sources into a single monthly payment, ideally at a lower interest rate. Using an unsecured personal loan to consolidate can save money on interest and give you an end date to work toward.

Unsecured personal loans for home improvement

Using an unsecured personal loan for home improvement is an option if you don’t have a lot of equity in your home or want to avoid using your home to secure the loan. By financing important repairs or updates, you can potentially increase the value of your home.

Other ways to use unsecured personal loans

You can use an unsecured personal to pay for medical expenses that aren’t covered by insurance or savings. However, it can be an expensive way to finance health-related expenses, and you may have cheaper options, so shop around before you apply.

You can also use an unsecured loan to fund a one-time, big expense like a move, wedding or vacation, though we recommend paying with savings whenever possible to avoid finance charges. Unsecured loans can also finance large purchases, such as a boat, motorcycle or RV, though these loans are often secured by the vehicle you’re buying.

How to qualify for an unsecured personal loan

Lenders may have different qualification requirements, but there are some general factors that help you qualify for low rates.

Good credit. Good- and excellent-credit borrowers (690 credit score or higher) typically get the lowest APR on a personal loan. Some lenders cater to fair- and bad-credit borrowers (689 credit score or lower), but the best terms and rates are reserved for those with high credit scores.

Low debt-to-income ratio. Many lenders check if your debt-to-income ratio is low enough to support monthly repayments. Some say borrowers need a 40% DTI or lower to qualify, but others have higher limits.

Stable credit history. Lenders favor borrowers who can show that they’ve consistently made on-time payments across multiple accounts — which can be credit cards, auto loans or other installment loans — over a number of years. Aim for at least two or three years of credit history across two or three accounts.

Steady income. Having a steady income can signal to a lender that you'll have the funds available to repay your loan.

How to apply for an unsecured personal loan

Pre-qualify: Make sure to shop around for the best unsecured personal loan. An easy way to do this is by pre-qualifying with multiple lenders, which allows you to see your potential loan amount and rate without affecting your credit score. Though not all lenders offer pre-qualification, most online lenders do.

Apply: Once you’ve chosen a lender, it’s time to apply for the loan. Many applications are completely online and require you to submit personal details, such as your name, address, contact details and Social Security number.

You’ll also need to submit documentation — usually proof of identity, employment and income.

Get funded: Once you’re approved, funding time can vary by lender. But in some cases, your loan can be funded the same or next business day after you’re approved.

Unsecured personal loan alternatives

You may want to consider alternatives along with a personal loan, depending on what you're financing.

0% APR credit card: These cards work well if you need to finance a major expense, repay medical bills or consolidate debt. You need good or excellent credit to qualify and debt small enough to be repaid in the card's interest-free promotional period, which can last up to 21 months.

Home equity loans and HELOCs: These are good options for home renovations if you're comfortable using your home as collateral and have enough equity to qualify. A home equity loan can give you a longer repayment term and typically a lower rate than a personal loan. A home equity line of credit lets you use funds as needed, and you only pay interest on what you use.

Last updated on November 29, 2022

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Unsecured Personal Loans: Borrow With No Collateral

Frequently asked questions