Last updated on July 9, 2024
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An unsecured personal loan 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. Compare unsecured personal loans with potentially cheaper options, and make sure the monthly payments don’t stress your budget.
Why trust NerdWallet
- 35+ personal loans reviewed and rated by our team of experts.
- 20+ years of combined experience covering personal loans and financial topics.
- Objective, comprehensive star rating system assessing 20+ categories and 70+ data points.
- Governed by NerdWallet's strict guidelines for editorial integrity.
NerdWallet's personal loans content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in consumer lending. Their work has appeared in The Associated Press, USA Today, The New York Times, MarketWatch and many other national, regional and local publications. They have been cited in publications including The Harvard Kennedy School, and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio.
Why trust NerdWallet
- 35+ personal loans reviewed and rated by our team of experts.
- 20+ years of combined experience covering personal loans and financial topics.
- Objective, comprehensive star rating system assessing 20+ categories and 70+ data points.
- Governed by NerdWallet's strict guidelines for editorial integrity.
NerdWallet's personal loans content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in consumer lending. Their work has appeared in The Associated Press, USA Today, The New York Times, MarketWatch and many other national, regional and local publications. They have been cited in publications including The Harvard Kennedy School, and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio.
Best Unsecured Personal Loans in 2024
Default
LightStream
Best for Home improvement loans
4.5
Rate discount
Est. APR
6.99-25.49%
Loan amount
$5K-$100K
Min. credit score
660
on LightStream's website
on NerdWallet
View details
Key Facts: LightStream is a solid option for good-credit borrowers, with no fees and low rates that vary based on loan purpose.
Qualifications:
- Minimum credit score: 660, but can vary depending on the loan purpose and amount.
- Maximum debt-to-income ratio: 50%.
- Minimum credit history: 3 years.
- Income sources accepted: Employment, retirement, rental income, alimony, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident who is at least 18 years old and has a U.S. bank account.
Available Term Lengths:2 to 7 years
Fees:
- Origination fee: None.
- Late fee: None.
SoFi Personal Loan
Best for Home improvement loans
5.0
Rate discount
Est. APR
8.99-29.99%
Loan amount
$5K-$100K
Min. credit score
None
Visit Lenderon SoFi's website
on SoFi's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Qualified borrowers will find few lenders better than SoFi, thanks to thoughtful perks like unemployment protection and free financial advising.
Qualifications:
- Must be at least 18 years old in most states.
- Must be a U.S. citizen, permanent or non-permanent resident, including DACA recipients and asylum seekers.
- Must be employed, have sufficient income from another source, or have an offer of employment to start within the next 90 days.
- Acceptable income sources: Employment, spouse’s income, retirement, alimony, child support, Social Security payments and disability benefits.
Available Term Lengths:2 to 7 years
Fees:
- Origination fee: 0% to 7%.
- Late fee: None.
Achieve Personal Loans
Best for Debt consolidation loans
4.5
Rate discount
Est. APR
8.99-35.99%
Loan amount
$5K-$50K
Min. credit score
640
Visit Lenderon Achieve's website
on Achieve's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Achieve personal loans can be a good debt consolidation option for fair- or good-credit borrowers who qualify for one of the lender’s rate discounts.
Qualifications:
- Minimum credit score: 640.
- Maximum debt-to-income ratio: 70% including a mortgage payment or other housing expense.
- Minimum income: None.
- Minimum credit history: 3 years across 2 accounts.
- Must be a U.S. citizen or permanent resident living in a state where Achieve operates.
- Must provide a Social Security number or ITIN.
Available Term Lengths:2 to 5 years
Fees:
- Origination fee: 1.99% - 6.99%.
- Late fee: $8.
Discover® Personal Loans
Best for Debt consolidation loans
5.0
Fast funding
Est. APR
7.99-24.99%
Loan amount
$2.5K-$40K
Min. credit score
660
Visit Lenderon Discover's website
on Discover's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: With competitive rates and no origination fees, Discover personal loans are good options for borrowers with good and excellent credit.
Qualifications:
- Minimum credit score: 660.
- Minimum annual household income: $25,000. Income can come from employment, retirement, alimony, child support, Social Security payments and disability benefits.
- Must provide a valid U.S. address and email address.
- Must be 18 years old with a valid Social Security number.
Available Term Lengths:3 to 7 years
Fees:
- Origination fee: None.
- Late fee: $39.
Happy Money
Best for Debt consolidation loans
4.5
Fast funding
Est. APR
11.72-17.99%
Loan amount
$5K-$40K
Min. credit score
640
Visit Lenderon Happy Money's website
on Happy Money's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: If you qualify for a low rate, Happy Money is a smart way to consolidate high-interest credit card debt into one fixed monthly payment.
Qualifications:
- Must be a U.S. citizen or permanent resident.
- Must have a valid Social Security number.
- Minimum credit score: 640.
- Minimum credit history: 6 years and 2 accounts.
- Maximum debt-to-income ratio: 55%.
- No bankruptcies filed in past two years.
Available Term Lengths:2 to 5 years
Fees:
- Origination fee: 1.5% to 5%.
Upstart
Best for Medical loans
5.0
Fast funding
Flexible payments
Est. APR
7.80-35.99%
Loan amount
$1K-$50K
Min. credit score
None
Visit Lenderon Upstart's website
on Upstart's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Upstart personal loans offer fast funding and may be an option for borrowers with low credit scores or thin credit histories. Upstart is a solid choice for financing large purchases.
Qualifications:
- Must be a U.S. citizen or permanent resident living in the U.S.
- Must be at least 18 years old in most states.
- Must have a valid email address and Social Security number.
- Must have a full- or part-time job, a full-time job offer starting within six months or another source of regular income.
- Must have a personal bank account at a U.S. financial institution with a routing number.
- No bankruptcies in the last 12 months.
- No current delinquent accounts on your credit reports.
- Fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.
- Minimum credit score: None.
- Minimum annual income: $12,000.
Available Term Lengths:3 to 7 years
Fees:
- Origination: 0% to 12%.
- Late fee: 5% of the unpaid amount or $15, whichever is greater.
- Insufficient funds fee: $15.
Prosper
Best for Medical loans
4.5
Est. APR
8.99-35.99%
Loan amount
$2K-$50K
Min. credit score
560
on NerdWallet
View details
Key Facts: Prosper accepts borrowers across the credit spectrum and offers competitive rates and fees, plus instant approval.
Qualifications:
- Minimum credit score: 560; borrower average is 705.
- Minimum income: No minimum requirement; borrower average is $131,000.
- Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.6% (including mortgage).
- Must be at least 18 years old.
- Must provide Social Security number and a U.S. bank account."
Available Term Lengths:2 to 5 years
Fees:
- Origination fee: 1% to 9.99%.
- Late fee: The greater of $15 or 5% of the unpaid amount.
- Insufficient funds fee: $15.
- Mailed-in payment fee: $5.
Best Egg
Best for Wedding loans
4.5
Secured loans
Wide range of loan amounts
Est. APR
7.99-35.99%
Loan amount
$2K-$50K
Min. credit score
600
Visit Lenderon Best Egg's website
on Best Egg's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Best Egg is worth considering for borrowers looking for a secured loan or to consolidate debt, but the loans come with an origination fee.
Qualifications:
- Minimum credit score: 600.
- Maximum debt-to-income ratio: 70% including a mortgage.
- Minimum credit history: 3 years and 1 account.
- Acceptable income sources: Employment, household income, alimony, retirement, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident and at least 18 years of age.
Available Term Lengths:3 to 5 years
Fees:
- Origination fee: 0.99% - 9.99%.
LendingClub
Best for Wedding loans
4.5
Flexible payments
Est. APR
8.98-35.99%
Loan amount
$1K-$40K
Min. credit score
600
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: LendingClub personal loans are a solid option for good-credit borrowers looking to consolidate debt and build their credit.
Qualifications:
- Minimum credit score: 600; average borrower score is above 700.
- Minimum income: None; lender requires proof of income. Borrower average is $100,000 per year.
- Maximum DTI: 40%.
- Minimum credit history: 36 months and two accounts.
Available Term Lengths:2 to 6 years
Fees:
- Origination fee: 3% to 8%.
- Late fee: 5% of payment or $15 after 15-day grace period.
- Insufficient funds: $15.
Upgrade
Best for Bad credit loans
5.0
Rate discount
Est. APR
8.49-35.99%
Loan amount
$1K-$50K
Min. credit score
580
Visit Lenderon Upgrade's website
on Upgrade's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.
Qualifications:
- Minimum credit score: 580.
- Minimum number of accounts on credit history: One account.
- Maximum debt-to-income ratio: 75%, including mortgage payments.
- Minimum length of credit history: Two years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security, disability benefits and other sources.
Available Term Lengths:2 to 7 years
Fees:
- Origination fee: 1.85% to 9.99%.
- Late Fee: $10.
- Failed payment fee: $10.
Universal Credit
Best for Bad credit loans
4.0
Fast funding
Rate discount
Est. APR
11.69-35.99%
Loan amount
$1K-$50K
Min. credit score
580
Visit Lenderon Universal Credit's website
on Universal Credit's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: A Universal Credit loan is a sound option for bad-credit borrowers looking to build credit, but rates are high compared to similar lenders.
Qualifications:
- Minimum credit score: 560.
- Minimum number of accounts on credit history: 1 account.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum length of credit history: 2 years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.
Available Term Lengths:3 to 5 years
Fees:
- Origination fee: 5.25% to 9.99%.
- Late fee: Up to $10.
- Non-sufficient funds fee: $10.
LightStream
4.5
Best for Home improvement loans
Est. APR
6.99-25.49%
Loan amount
$5K-$100K
Min. credit score
660
Best for Home improvement loans
Rate discount
on LightStream's website
on NerdWallet
View details
Key Facts: LightStream is a solid option for good-credit borrowers, with no fees and low rates that vary based on loan purpose.
Qualifications:
- Minimum credit score: 660, but can vary depending on the loan purpose and amount.
- Maximum debt-to-income ratio: 50%.
- Minimum credit history: 3 years.
- Income sources accepted: Employment, retirement, rental income, alimony, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident who is at least 18 years old and has a U.S. bank account.
Available Term Lengths:2 to 7 years
Fees:
- Origination fee: None.
- Late fee: None.
SoFi Personal Loan
5.0
Best for Home improvement loans
Est. APR
8.99-29.99%
Loan amount
$5K-$100K
Min. credit score
None
Best for Home improvement loans
Rate discount
Visit Lenderon SoFi's website
on SoFi's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Qualified borrowers will find few lenders better than SoFi, thanks to thoughtful perks like unemployment protection and free financial advising.
Qualifications:
- Must be at least 18 years old in most states.
- Must be a U.S. citizen, permanent or non-permanent resident, including DACA recipients and asylum seekers.
- Must be employed, have sufficient income from another source, or have an offer of employment to start within the next 90 days.
- Acceptable income sources: Employment, spouse’s income, retirement, alimony, child support, Social Security payments and disability benefits.
Available Term Lengths:2 to 7 years
Fees:
- Origination fee: 0% to 7%.
- Late fee: None.
Achieve Personal Loans
4.5
Best for Debt consolidation loans
Est. APR
8.99-35.99%
Loan amount
$5K-$50K
Min. credit score
640
Best for Debt consolidation loans
Rate discount
Visit Lenderon Achieve's website
on Achieve's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Achieve personal loans can be a good debt consolidation option for fair- or good-credit borrowers who qualify for one of the lender’s rate discounts.
Qualifications:
- Minimum credit score: 640.
- Maximum debt-to-income ratio: 70% including a mortgage payment or other housing expense.
- Minimum income: None.
- Minimum credit history: 3 years across 2 accounts.
- Must be a U.S. citizen or permanent resident living in a state where Achieve operates.
- Must provide a Social Security number or ITIN.
Available Term Lengths:2 to 5 years
Fees:
- Origination fee: 1.99% - 6.99%.
- Late fee: $8.
Discover® Personal Loans
5.0
Best for Debt consolidation loans
Est. APR
7.99-24.99%
Loan amount
$2.5K-$40K
Min. credit score
660
Best for Debt consolidation loans
Fast funding
Visit Lenderon Discover's website
on Discover's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: With competitive rates and no origination fees, Discover personal loans are good options for borrowers with good and excellent credit.
Qualifications:
- Minimum credit score: 660.
- Minimum annual household income: $25,000. Income can come from employment, retirement, alimony, child support, Social Security payments and disability benefits.
- Must provide a valid U.S. address and email address.
- Must be 18 years old with a valid Social Security number.
Available Term Lengths:3 to 7 years
Fees:
- Origination fee: None.
- Late fee: $39.
Happy Money
4.5
Best for Debt consolidation loans
Est. APR
11.72-17.99%
Loan amount
$5K-$40K
Min. credit score
640
Best for Debt consolidation loans
Fast funding
Visit Lenderon Happy Money's website
on Happy Money's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: If you qualify for a low rate, Happy Money is a smart way to consolidate high-interest credit card debt into one fixed monthly payment.
Qualifications:
- Must be a U.S. citizen or permanent resident.
- Must have a valid Social Security number.
- Minimum credit score: 640.
- Minimum credit history: 6 years and 2 accounts.
- Maximum debt-to-income ratio: 55%.
- No bankruptcies filed in past two years.
Available Term Lengths:2 to 5 years
Fees:
- Origination fee: 1.5% to 5%.
Upstart
5.0
Best for Medical loans
Est. APR
7.80-35.99%
Loan amount
$1K-$50K
Min. credit score
None
Best for Medical loans
Fast funding
Flexible payments
Visit Lenderon Upstart's website
on Upstart's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Upstart personal loans offer fast funding and may be an option for borrowers with low credit scores or thin credit histories. Upstart is a solid choice for financing large purchases.
Qualifications:
- Must be a U.S. citizen or permanent resident living in the U.S.
- Must be at least 18 years old in most states.
- Must have a valid email address and Social Security number.
- Must have a full- or part-time job, a full-time job offer starting within six months or another source of regular income.
- Must have a personal bank account at a U.S. financial institution with a routing number.
- No bankruptcies in the last 12 months.
- No current delinquent accounts on your credit reports.
- Fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.
- Minimum credit score: None.
- Minimum annual income: $12,000.
Available Term Lengths:3 to 7 years
Fees:
- Origination: 0% to 12%.
- Late fee: 5% of the unpaid amount or $15, whichever is greater.
- Insufficient funds fee: $15.
Prosper
4.5
Best for Medical loans
Est. APR
8.99-35.99%
Loan amount
$2K-$50K
Min. credit score
560
Best for Medical loans
on NerdWallet
View details
Key Facts: Prosper accepts borrowers across the credit spectrum and offers competitive rates and fees, plus instant approval.
Qualifications:
- Minimum credit score: 560; borrower average is 705.
- Minimum income: No minimum requirement; borrower average is $131,000.
- Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.6% (including mortgage).
- Must be at least 18 years old.
- Must provide Social Security number and a U.S. bank account."
Available Term Lengths:2 to 5 years
Fees:
- Origination fee: 1% to 9.99%.
- Late fee: The greater of $15 or 5% of the unpaid amount.
- Insufficient funds fee: $15.
- Mailed-in payment fee: $5.
Best Egg
4.5
Best for Wedding loans
Est. APR
7.99-35.99%
Loan amount
$2K-$50K
Min. credit score
600
Best for Wedding loans
Secured loans
Wide range of loan amounts
Visit Lenderon Best Egg's website
on Best Egg's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Best Egg is worth considering for borrowers looking for a secured loan or to consolidate debt, but the loans come with an origination fee.
Qualifications:
- Minimum credit score: 600.
- Maximum debt-to-income ratio: 70% including a mortgage.
- Minimum credit history: 3 years and 1 account.
- Acceptable income sources: Employment, household income, alimony, retirement, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident and at least 18 years of age.
Available Term Lengths:3 to 5 years
Fees:
- Origination fee: 0.99% - 9.99%.
LendingClub
4.5
Best for Wedding loans
Est. APR
8.98-35.99%
Loan amount
$1K-$40K
Min. credit score
600
Best for Wedding loans
Flexible payments
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: LendingClub personal loans are a solid option for good-credit borrowers looking to consolidate debt and build their credit.
Qualifications:
- Minimum credit score: 600; average borrower score is above 700.
- Minimum income: None; lender requires proof of income. Borrower average is $100,000 per year.
- Maximum DTI: 40%.
- Minimum credit history: 36 months and two accounts.
Available Term Lengths:2 to 6 years
Fees:
- Origination fee: 3% to 8%.
- Late fee: 5% of payment or $15 after 15-day grace period.
- Insufficient funds: $15.
Upgrade
5.0
Best for Bad credit loans
Est. APR
8.49-35.99%
Loan amount
$1K-$50K
Min. credit score
580
Best for Bad credit loans
Rate discount
Visit Lenderon Upgrade's website
on Upgrade's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.
Qualifications:
- Minimum credit score: 580.
- Minimum number of accounts on credit history: One account.
- Maximum debt-to-income ratio: 75%, including mortgage payments.
- Minimum length of credit history: Two years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security, disability benefits and other sources.
Available Term Lengths:2 to 7 years
Fees:
- Origination fee: 1.85% to 9.99%.
- Late Fee: $10.
- Failed payment fee: $10.
Universal Credit
4.0
Best for Bad credit loans
Est. APR
11.69-35.99%
Loan amount
$1K-$50K
Min. credit score
580
Best for Bad credit loans
Fast funding
Rate discount
Visit Lenderon Universal Credit's website
on Universal Credit's website
Check Rateon NerdWallet
on NerdWallet
View details
Key Facts: A Universal Credit loan is a sound option for bad-credit borrowers looking to build credit, but rates are high compared to similar lenders.
Qualifications:
- Minimum credit score: 560.
- Minimum number of accounts on credit history: 1 account.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum length of credit history: 2 years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.
Available Term Lengths:3 to 5 years
Fees:
- Origination fee: 5.25% to 9.99%.
- Late fee: Up to $10.
- Non-sufficient funds fee: $10.
What is an unsecured personal loan?
An unsecured personal loan is a loan from an online lender, a bank or a 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 typically 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, your house or a savings or retirement account.
Because 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. If you fail to repay an unsecured loan, your credit will take a hit.
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 with 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. |
» MORE: Secured vs. unsecured loan: What’s the difference?
How do unsecured loans work?
To get an unsecured loan, you’ll need to apply with a bank, a credit union or an 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 (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% APR and choose a two-year repayment term, you’ll make monthly payments of $339. The loan will cost $1,146 in total interest.
🤓
Nerdy Tip
You can use NerdWallet’s personal loan calculator to plug in your potential loan amount, repayment term and APR to see what your monthly personal loan payments would be.
Here’s a look at average personal loan interest rates, based on your credit bracket.
Borrower credit rating | Score range | Estimated APR |
Excellent | 720-850. | 11.35%. |
Good | 690-719. | 14.34%. |
Fair | 630-689. | 17.64%. |
Bad | 300-629. | 22.29%. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from Aug. 1, 2024, through Aug. 31, 2024. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum 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 debts can save money on interest and give you an end date to work toward.
» COMPARE: Best debt consolidation loans
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.
» COMPARE: Best home improvement loans
Other ways to use unsecured personal loans
You can use an unsecured personal loan to pay for medical expenses or car repairs that aren’t covered by insurance or savings. However, it can be an expensive way to finance these costs, 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.
How to get 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.
» COMPARE: Best personal loans for bad credit
Low debt-to-income ratio: Many lenders check whether your debt-to-income ratio is low enough to support monthly repayments. Some say borrowers need a 45% 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.
» MORE: Tips to boost your chances of qualifying for a 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.
» MORE: Pre-qualify with lenders for free on NerdWallet
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.
Plan for monthly payments: Your first payment generally comes due 30 days after closing your loan. Take time to adjust your budget to ensure on-time monthly payments. This can help you avoid late fees and hits to your credit.
» MORE: How to successfully manage your personal loan
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 extend 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 (HELOC) lets you use funds as needed, and you only pay interest on what you use.
Last updated on July 9, 2024
Methodology
NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. 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. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. 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.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
NerdWallet's Best Unsecured Personal Loans in 2024
- LightStream: Best for Home improvement loans
- SoFi Personal Loan: Best for Home improvement loans
- Achieve Personal Loans: Best for Debt consolidation loans
- Discover® Personal Loans: Best for Debt consolidation loans
- Happy Money: Best for Debt consolidation loans
- Upstart: Best for Medical loans
- Prosper: Best for Medical loans
- Best Egg: Best for Wedding loans
- LendingClub: Best for Wedding loans
- Upgrade: Best for Bad credit loans
- Universal Credit: Best for Bad credit loans
Frequently asked questions
What does it mean when a loan is unsecured?
A loan that's unsecured is one you don't need collateral, like a car or savings account, to secure. Instead, a lender considers your credit score, existing debts, income and other factors about you on a personal loan application.
How do I qualify for an unsecured personal loan?
Lenders vary in their requirements for borrowers. A good credit score (690 or higher), a low debt-to-income ratio and a credit history of at least a few years will help you qualify in most cases. Some lenders tailor their loans to bad- and fair-credit borrowers, so you may have options even with less-than-desirable credit. You can pre-qualify to see what loan rates and terms you could qualify for.
Do unsecured loans affect your credit?
If you borrow an unsecured loan, your credit will be affected in two ways. When you formally apply for the loan (which is different from pre-qualifying), the lender will do a hard credit inquiry, which causes a temporary dip in your credit score. The lender will also report your monthly payments to the credit bureaus, which can help you build credit with on-time payments.
Are unsecured loans safe?
Unsecured loans are safe when they come from reputable lenders. A lender should check your ability to repay the loan, be transparent about the loan's overall cost and help you build credit.
