Best Unsecured Personal Loans of December 2024

We compared the best lenders for unsecured loans based on factors like eligibility requirements, loan amounts, and repayment terms and determined that SoFi is the best choice. It stands out from the pack thanks to its long loan terms, same-day funding, zero fees, and loan amounts up to $100,000. 

An unsecured personal loan is an installment loan offered by a bank, credit union, or other lender that isn’t backed or “secured” by any asset, such as your home or car.  

Instead, these loans are approved based on how likely the lender thinks you are to pay the loan back, which it determines by considering your credit score, debt-to-income ratio, income, and other factors. 

The best unsecured loans are affordable, send money within days of your application, and carry a rate that's competitive based on your credit score and income. 

Best unsecured personal loans

Personal loans can be used for a variety of purposes, with some of the more common being emergencies, medical expenses, home improvement projects, and debt consolidation. 

We reviewed over 20 lenders and considered interest rates, loan terms, loan amounts, credit requirements, time to fund, and more to determine the best unsecured loans.

Methodology

Credible evaluated the best personal loan lenders for unsecured loans based on factors such as minimum and maximum interest rates, maximum loan amount, funding time, loan terms, fees, discounts, credit and income requirements, and whether cosigners are accepted. 

Credible’s team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

How do I compare unsecured personal loans?

There are several factors you should consider to make sure you’re getting the best personal loan for you:

• Annual percentage rate (APR): One of the biggest things to consider is the APR, which determines how much borrowing will cost you. The APR takes both the interest rate on the loan and any upfront fees into account, such as an origination fee. APRs can vary widely, depending on your credit score, overall financial situation, and the lender.
• Fees: Many lenders charge an origination fee, usually calculated as a percentage of the total loan amount and automatically subtracted from the amount that’s disbursed to you. Some other fees might include a documentation fee, optional credit or disability insurance, and late fees.
• Loan term: The term of the loan refers to its length, or how long it will take you to pay it back off. Generally, a shorter loan term means a lower interest rate, lower total cost, and higher monthly payments. Personal loan repayment terms generally run from 1 to 7 years, but some lenders may offer longer terms, depending on the loan’s purpose.
• Loan amount: We reviewed lenders that offer loans as low as $600 up to $200,000. If you need a loan amount under $2,000 or above $50,000, be sure to only consider lenders that offer what you need. Avoid taking out more than you need, as this can significantly increase the cost of your loan.
• Monthly payment: When selecting a loan, make sure the monthly payment fits comfortably within your budget. While you want to pay the lowest interest rate and the fewest fees, you don’t want to hurt or even ruin your credit by missing payments or defaulting on a loan you can’t repay.
• Funding time: If you need a quick personal loan, compare loan funding times between lenders — that is, how long it’s likely to take from the approval of your application to the disbursement of funds to your account. This can vary widely from lender to lender, but many offer funding within 1 to 3 business days, and some offer same-day funding.
• Customer experience: Make sure that any lender you choose has readily available customer service and convenient payment options that work for you. For example, if you prefer to transact from your phone, make sure the lender has a mobile app to your liking.
• Lender reputation: Look at online reviews, check with your state’s regulatory agency, and look the company up with the Better Business Bureau. It’s likely you’ll see complaints for any lender, but if the same issues come up repeatedly, it could be a red flag.

What are the requirements for an unsecured personal loan?

When you apply for a loan, you’re not just analyzing lenders — they’ll analyze you, too. Here are some of the things lenders will look at and ask for when they’re reviewing your loan application:

Your credit score and history

This is one of the most important factors a lender considers. Your credit score is a number that reflects your financial history, including your payment history, current debts, how much credit you’ve used vs. how much you have available, and how many new applications for credit you’ve made.

A high credit score means that lenders generally consider you a low-risk person to lend to — someone who pays their bills on time, has had accounts in good standing for a long time, doesn’t use too much of their available credit, and hasn’t been opening a flurry of new accounts. Lenders typically offer borrowers with high credit scores the lowest interest rates.

Debt-to-income ratio

Your debt-to-income ratio (DTI) is a simple equation of how much of your monthly income goes to repaying debt. You can calculate it by adding up all your minimum monthly payments, then dividing that number by your monthly gross income. A debt-to-income ratio of 36% or less is considered good, though some lenders will accept a higher DTI.

Employment and income

Lenders generally need to know you have an income and a job. They may request pay stubs, bank statements, or tax returns to verify your income. You should have enough income to comfortably make loan payments in addition to the payments you already have.

Related: How To Get a Personal Loan If You're Unemployed

Loan amount

The total dollar amount you’re seeking needs to be in line with what you’re capable of paying back. If lenders don’t think it is, they may deny your application or approve you for a smaller loan amount. Make sure you’re not asking to borrow more money than you really need, or are able to pay back.

Learn More: What Are the Requirements for a Personal Loan?

How do I improve my chances of getting approved for an unsecured loan?

If you’re concerned about getting approved or have had trouble doing so, these steps may help:

• Add a cosigner: Getting a personal loan with a cosigner with a strong credit history and low DTI can help you qualify for a loan. This is because the cosigner agrees to be responsible for your loan if you miss payments. Before you ask someone to cosign a loan with you, make sure you can afford the payments for the term of your loan. It can be incredibly damaging to your relationship if your cosigner is forced to cover your loan.
• Boost your income: If possible, improve your debt-to-income ratio by increasing your income. Seek a higher-paying job and consider gig or freelance work to supplement your earnings.
• Pay off debt: Another way to improve your chance of qualifying is to reduce your DTI by paying off smaller, existing debts. This, like many other credit-boosting measures, may take time and requires that you’re able to wait to take out a loan.
• Improve your credit: It’s always good practice to pay bills on time and reduce your debt load because it can have a dramatic effect on your credit score over time. A quicker way to improve your credit could be to pay for a service that reports payments like rent, utility, and your phone bill to the bureaus, such as Experian Boost and Self.
• Get a secured loan: If you attach collateral, such as your car or home, to secure the loan, it could help you qualify, as it gives the lender greater peace of mind that you’re committed to making payments. It also means your lender can seize or put a lien on your collateral if you don’t make payments or default. Having this option also reduces lender risk.

Learn More: Ways To Improve Your Personal Loan Application

How do I get an unsecured personal loan?

Consider these steps when getting an unsecured personal loan:

1. Check your credit: Check your credit report first. If you note any errors, report them to the credit bureaus immediately, and wait for your score to reflect the changes before you apply. Knowing your credit score is also a good way to eliminate certain lenders, since most have minimum credit score requirements.
2. Compare lenders: Shop around to compare interest rates, fees, loan amounts, and payment terms. Comparing APR ranges is a good way to start this process. Try to find each lender’s minimum credit score requirements as well.
3. Prequalify: Once you’ve determined which lenders look good, prequalify with those that will let you. Prequalification provides an estimate of the APR, loan amount, and loan terms you might qualify for, without hurting your credit score. Note that a hard credit pull — which does affect your score — will follow when you submit a formal application. Prequalification is not an offer of credit, and final rates may be higher.
4. Apply for a loan: When you have found the best option, submit an application. Expect to provide government ID, proof of income, and other documentation to support your application.
5. Finalize loan and begin payments: Once approved, you’ll need to sign the paperwork prior to disbursement — make sure you read and understand the fine print before signing. Once you receive the money, you’ll begin making payments. Consider setting up automatic payments to help prevent missed payments, late fees, and damage to your credit score.

Learn More: How To Get a Personal Loan

Pros and cons of unsecured loans

Compared to secured loans, unsecured loans have upsides and downsides. Here are some of the major ones to consider:

Pros:

• No risk of losing your collateral: With an unsecured loan, you’re not pledging your home, car, or other asset, which means your lender can’t take it if you don’t make your payments.
• Simplified process: Without the need for collateral, the application process is based solely on your credit profile, which makes it faster.

Cons:

• APRs may be higher: Since the lender has no collateral to back the loan, it may perceive it as riskier than a secured loan, which usually means a higher interest rate and possibly higher fees.
• More difficult to qualify for: Without the backing of collateral, it may be difficult to get approved for a personal loan with an attractive interest rate, or get approved for one at all.

Secured vs. Unsecured Loans

The difference between secured and unsecured loans is that the former are “secured” by an asset that you own. In essence, with a secured personal loan you are pledging something to the lender that it can claim if you don’t meet your end of the bargain. They are often backed by a home, a car, or sometimes a financial asset, like a bank account or certificate of deposit.

In contrast, unsecured loans don’t have any such backing. And while that makes the loan process simpler and doesn’t risk your possessions, unsecured personal loans often have higher interest rates than secured personal loans.

Related Articles:

• How To Get Approved for a Personal Loan
• Best Personal Loans for Fair Credit
• Best Personal Loans for Good Credit
• Best Personal Loans for Excellent Credit
• Best Personal Loans With No Origination Fee
• Best Low-Interest Personal Loans