Unsecured loans, also known as signature or personal loans, are usually approved based on the borrowers ability to repay the loan, in addition to their recent credit history. The purpose of a personal loan is usually for debt consolidation, home improvement, paying for education, medical bills, or cash. Owning a home is not a requirement, because the loans are unsecured by a property lien, which can also benefit homeowners with little or no home equity. 

Unsecured loan rates can be fixed with funding in one lump sum, or a line of credit with variable loan rates, withdrawn in different amounts as needed.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

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

Unsecured loan rates may be higher than a home equity loan, because they are generally considered a higher risk by lenders, 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.