We partner with lenders that offer unsecured loans. Traditionally, when a loan was needed, you would head to a bank or credit union to apply in person. This could be a rather time-consuming process, especially if you were trying to shop around to find the best deals. While many people still choose to apply in person, today you have the advantage of finding the loans you need online. By using our service, you can quickly get connected with hundreds of different lenders. You are then able to compare your options, find the loan that is right for you, all without leaving the comfort of your own home.
What is an Unsecured Personal Loan?
An unsecured personal loan is a type of loan that does not require collateral to “secure” the money you borrow. It can be used for a variety of different purposes such as consolidating debts, purchasing an appliance for your home or even starting your own business. These types of loans require that you pay back the borrowed balance plus interest. Your interest rate is fixed, meaning that it cannot change during the life of your loan and your payment is the same every month. Repayment periods vary, usually from 24 to 60 months. While longer repayment periods mean lower monthly payments, they also mean you pay more in interest over time. In contrast, shorter repayment periods result in larger payments, but less interest when the loan is finally paid off.
Unsecured Vs Secured Loans
Unsecured loans are not the only type of loan available. There are also loans that are known as secured loans. Secured loans are those that require you to offer some form of collateral to secure the money you want to borrow. In the event that you default on the loan, the bank can then take possession of the offered collateral (car, house, etc.). In the event that you default on an unsecured loan, the lender can take other actions. These actions may include putting your debt into collections or taking you to court. If the court rules in favor of the lender you will be ordered to pay the debt, which may mean garnished wages or a lien against your house.
There are several other differences between unsecured and secured loans. Secured loans often have higher borrowing limits and lower interest rates (which can be fixed or variable) due to the fact that collateral is involved. You may also have longer repayment periods. Unsecured loans tend to have lower borrowing limits and higher interest rates, but the rates are fixed and will not change during the life of the loan. Unsecured loans are also easier to obtain and require much less paperwork to apply.
Types of Unsecured Personal Loans
There are a few different types of unsecured personal loans and they may be revolving or term loans. A revolving loan is one that has a set limit that can be spent, paid back and then used again. These types of loans include lines of credit and credit cards. A term loan is one in which you borrow a specific amount of money that is used only once. You then repay the loan in installments until the loan is completely paid off. The payments are designed so that the loan will be paid off completely by the end of its term. While term loans are commonly used with secured loans (car loans and mortgages), they can also be used for unsecured loans such as signature loans, consolidation loans and peer to peer loans.
Determining Your Eligibility
How do lenders determine if you are eligible for an unsecured personal loan? There are a few different factors that go into determining your eligibility, but one of the biggest factors is your credit score. Your credit score is determined by your credit history (a detailed record of your credit accounts and your repayments) and represents your creditworthiness. The better your credit history, the higher your credit score. The higher your credit score, the more options you will have available to you and the more likely you are to be approved for your unsecured personal loan. A high credit score can also mean that you will qualify for lower interest rates.
What if You Have Bad Credit?
Just because you have bad credit, that doesn’t mean you can’t get an unsecured personal loan. A lower credit score will limit your options though. Keep in mind that the lower your credit score, the higher your interest rate will be when you are approved for your loan. A cosigner can be helpful. Making an effort to improve your credit score can also be beneficial.
- Loans from $300 - $5,000
- Fast Approval Decision
- No Complicated Paperwork
- Bad Credit OK
- Funds Direct Deposited
- Quick Online Process
- Short & Longer Terms