What Is an Unsecured Personal Loan with No Collateral?
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Editor’s note: At Lantern, we strive to help you make financial decisions with confidence. To do this, we occasionally feature content that includes information about our partners and their products or services. We do not provide, endorse, or guarantee any third-party product, service, information or recommendations—and our opinions are our own.
What is an Unsecured Loan?
How Do You Qualify for an Unsecured Personal Loan?
What Credit Score Do You Need for an Unsecured Personal Loan?
Can You Get an Unsecured Personal Loan with Bad Credit?
Where Can You Get an Unsecured Personal Loan?
Do Unsecured Loans Affect Your Credit?
When You Apply for the Loan
When Your New Loan Goes Through
When You Begin Making Payments
If You Use the Loan to Pay Down Debt
Are Unsecured Personal Loans Safe?
Evaluates Your Credit
Is Transparent About Its Terms
Has Fair Terms You Can Live With
Reports Payments to the Credit Bureaus
Who Should Consider an Unsecured Personal Loan?
Pros and Cons of an Unsecured Personal Loan
Pros of an Unsecured Personal Loan
No collateral is required to secure the loan. Approvals are generally faster than they are for other types of loans. (There’s no need to appraise the asset being offered as collateral.)* Funds can typically be used for almost anything. (Though some lenders may have restrictions.)
Cons of an Unsecured Personal Loan
Interest rates tend to be higher than they are for secured loans. (But less than many credit card interest rates.) Borrowing limits may be lower than they are for a secured loan. Monthly payments may be higher than credit card minimum payments. Some lenders may charge high fees or penalties that can make the loan more expensive. Failing to make payments can hurt your credit and make it harder to borrow in the future.
What Are Some Common Uses for Unsecured Personal Loans?
Paying Off Credit Card Debt
Consolidating Different Types of Debt
Financing Home Improvements or Repairs
Paying Off Unexpected Medical Bills
Paying for a Wedding
What Are Some Alternatives to Using an Unsecured Personal Loan?
Personal Line of Credit
Peer-to-Peer (P2P) Lending
Home Equity Loan or Home Equity Line of Credit (HELOC)
Frequently Asked Questions
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