Unsecured loans, which are also known as signature loans, or personal loans, are usually approved based on the borrowers ability to repay the loan, in addition to credit history. The purpose of an unsecured personal loan is usually for debt consolidation, home improvement, paying for education, medical bills, or cash. Unsecured loan rates are not based on owning a home, or any loan to value requirement, because the loans are not secured by a lien against property.   

Get Rates for a Personal Unsecured Loan

Personal unsecured loans can be fixed with funding in one lump sum, or a line of credit with variable loan rates, withdrawn in different amounts as needed. Approval for personal loans is quick, usually from 1 to 3 business days.

Other points to keep in mind when comparing unsecured loans, consider the total cost of the loan and not just the monthly payments, make sure all the terms of a unsecured personal loan are in writing, and not verbal promises, and look for any hidden loan fees in the estimate of closing costs.

Unsecured loan rates are typically higher than refinance or home equity loans, because they are generally considered a higher risk, since there is no collateral security. Also, lenders may charge a periodic loan service fee, the term is usually shorter, and the interest paid is not tax deductible.