An unsecured loan is a type of loan that does not require any form of collateral. Instead of relying on a borrower's assets as security, lenders approve unsecured loans based on the borrower's creditworthiness. Examples of unsecured loans include personal loans, student loans, and credit cards. These loans do not require collateral such as a house or car for approval. Rather than collateral, lenders issue these loans based on information about the borrower, such as their credit history, income, and outstanding debts.
Interest and sometimes fees are charged on unsecured loans. Whether an unsecured loan is the right choice depends on the borrower's financial situation and the purpose of the funds. Rates vary depending on many factors, such as the borrower's creditworthiness (e.g. credit score and credit history) and the duration of the loan (e.g. 36-month loan rates are generally lower than 72-month loan rates).
As lenders take more risks when loans are not backed by collateral, they may charge higher interest rates and require good or excellent credit. Other charges may include late payment fees, prepayment fees for prepayment, and fees for a missed payment. Wells Fargo personal loans stand out due to their wide range of loan amounts and flexible terms, but borrowers cannot prequalify. A debt consolidation loan with a low interest rate can be a more affordable way to pay off existing debt. Obtaining a loan for business purposes can be difficult, especially when collateral is required, increasing the risk to the borrower. Loan approval and actual loan terms depend on the borrower's ability to meet underwriting requirements (including but not limited to responsible credit history, sufficient income after monthly expenses, and availability of collateral).
A home equity loan can provide a longer repayment term and usually a lower rate than a personal loan. All loan terms, including interest rate, annual percentage rate (APR), and monthly payments shown on this website are from lenders and are estimates based on the limited information provided by the borrower. Fees are typically a percentage of the amount borrowed and typically range from 1% to 5% of the loan amount. Marcus Unsecured Loans can be used for many types of expenses such as debt consolidation, weddings, or big moves. The APR will be determined based on the borrower's credit, income, and other information provided in their loan application. A personal line of credit does not have fixed rates like personal loans so payments can vary from month to month.
Using an unsecured personal loan to consolidate can save money on interest and provide an end date to work towards.