Best unsecured personal loans of April 2024
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BLUEPRINT
Updated 2:23 p.m. UTC April 8, 2024
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Many loans are secured by collateral — for example, a mortgage is secured by a home. Most personal loans, however, are unsecured, making it more convenient to cover a variety of expenses — like credit card debt or a major purchase — without collateral.
In 2024, the best unsecured personal loans come with competitive interest rates, a variety of loan amounts, relatively long repayment terms and fast funding times. Some also have more lenient credit score requirements while others allow you to apply with a co-signer or joint applicant, which could help you qualify more easily.
Best unsecured personal loans
- SoFi: Best for fast funding.
- Upgrade: Best for co-borrowers.
- LendingPoint: Best for fair credit.
- Prosper: Best for peer-to-peer lending.
- LightStream: Best for large loans.
- Discover: Best for competitive rates.
- Axos Bank: Best for good credit.
- Oportun: Best for small loans.
Why trust our personal loan experts
Our team of experts evaluated hundreds of personal loan products and analyzed thousands of data points to help you find the best fit for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 40 personal loan lenders reviewed.
- 640 data points analyzed.
- 6-stage fact-checking process.
Compare the best unsecured personal loans
| INTEREST RATES | LOAN AMOUNTS | REPAYMENT TERMS (YEARS) | MIN. CREDIT SCORE | |
|---|---|---|---|---|
SoFi
| 8.99% to 29.49%
| $5,000 to $100,000
| 2 to 7
| No specific minimum
|
Upgrade
| 8.49% to 35.99%
| $1,000 to $50,000
| 2 to 7
| No specific minimum
|
LendingPoint
| 7.99% to 35.99%
| $2,000 to $36,500
| 2 to 6
| 660 |
Prosper
| 6.99% to 35.99%
| $2,000 to $50,000
| 2 to 5
| 600 |
LightStream
| 6.99% to 25.99%
| $5,000 to $100,000
| 2 to 12 (depending on loan type)
| Does not disclose
|
Discover
| 7.99% to 24.99%
| $2,500 to $40,000
| 3 to 7
| 660 |
Axos Bank
| 11.79% to 20.84%
| $7,000 to $50,000
| 3 to 6
| 700 |
Oportun
| 34.95% to 35.99% | $300 to $8,000
| 1 to 4.08 years (depending on your state)
| No specific minimum
|
All interest rates are current and include discounts as applicable as of April 22, 2024.
Methodology
Our expert writers and editors have reviewed and researched multiple lenders to help you find the best unsecured personal loan. Out of all the lenders considered, the eight that made our list excelled in areas across the following categories (with weightings): loan details (20%), loan cost (35%), eligibility and accessibility (20%), customer service (15%) and ease of application (10%).
Within each major category, we considered several characteristics, including APR ranges, loan amounts, maximum repayment terms, lender discounts, late payment and prepayment penalties, minimum credit score requirements and funding time as well as co-signer or co-borrower acceptance. We also evaluated each provider’s customer support options and customer reviews.
Why some lenders didn’t make the cut
Of the personal loan lenders that we reviewed, only a fraction made the cut. The reasons for this varied by lender, with many not receiving high enough scores to be included due to having higher interest rates, limited customer service options and poor customer reviews. Several also do not allow co-signers or co-borrowers.
What is an unsecured personal loan?
An unsecured personal loan is a type of loan that allows borrowers to access funds without the need to provide collateral. Unlike secured loans where the borrower must put up an asset like a house or car as a guarantee, unsecured loans are backed solely by the borrower’s creditworthiness. This is determined by their credit score, income and other financial factors.
Unsecured personal loans can be used for a wide range of purposes — such as consolidating high-interest debt, making home improvements, paying unexpected medical bills or covering a large purchase. These loans generally come with fixed interest rates and repayment terms, meaning you’ll make the same monthly payment for the entire life of the loan.
However, keep in mind that these loans often come with higher interest rates and more stringent requirements compared to secured loans. This is because there’s more risk involved for the lender without the added security of collateral.
Best places to get an unsecured loan
You can get an unsecured loan from several different types of financial institutions, including traditional banks and credit unions as well as online lenders. In general, the best lenders that offer unsecured loans — including those listed above — provide competitive rates, a wide range of loan amounts, a variety of repayment term options and quick funding.
Each lender has its own specific eligibility criteria and offers different interest rates and terms, so shopping around and comparing your options with as many lenders as possible is essential to find a good deal.
How to apply for an unsecured personal loan
If you’re ready to apply for an unsecured personal loan, follow these steps:
- Check your credit. Lenders will check your credit score as part of the application process to determine your creditworthiness. Before you apply, use a site like AnnualCreditReport.com to review your credit reports for free, and dispute any errors with the appropriate credit bureau to potentially boost your credit score. To get your credit score, you can use an online credit-monitoring service, or see if it’s available through your bank or credit card company.
- Research different lenders. Important factors like interest rates, repayment terms, fees and customer service can vary significantly from one lender to another. Be sure to compare as many personal loan lenders as you can to see which one offers the best option for your needs. Many lenders let you pre-qualify with only a soft credit check, which will let you see what rates and terms you could get approved for. Use our personal loan calculator to check how these terms could affect your repayment costs.
- Pick a loan option and apply. After researching lenders, choose the one you like best. You’ll then need to submit a formal application. Many lenders offer a fully online application process while others might require you to call or visit a local branch to discuss your options with a loan officer. Make sure to fill out all information accurately to avoid delays in approval and funding. Also be prepared to provide required documentation, such as pay stubs or tax returns.
- Await approval and get your funds. After you submit your application, the lender will review it and make a decision. This could take anywhere from a few hours to a few days, depending on the lender. If you’re approved, the lender will have you sign loan documents so the funds can be disbursed. In general, funding for an unsecured personal loan takes about a week — though some lenders offer funding as fast as the same or next business day after approval.
Alternatives to unsecured loans
Unsecured personal loans can be beneficial if you need immediate access to funds without collateral. Still, they might not be the best option for every borrower, primarily due to their higher interest rates and more stringent requirements. If an unsecured loan doesn’t seem right for you, here are some alternatives to consider:
- Secured personal loan: Unlike unsecured loans, secured loans require an asset — such as your car — to act as collateral. This reduces risk for the lender, often resulting in lower interest rates. However, you risk losing the collateral if you’re unable to repay the loan.
- Credit card: A credit card can be a helpful option if you don’t know how much you need to borrow or will have recurring expenses. Some cards offer introductory periods with 0% APR, which can help you avoid interest if you can repay your balance before that period ends. However, you could end up with significant interest charges if you can’t pay off your card in time. Also note that credit cards generally have higher interest rates than both secured and unsecured personal loans.
- Home equity loan: If you’re a homeowner with sufficient equity in your home, you might consider a home equity loan, which provides a lump sum to use how you’d like similar to a personal loan. Home equity loans also typically have lower interest rates than personal loans. However, your home is used as collateral, meaning the lender could foreclose on it if you default on your payments.
- HELOC: Another option for homeowners could be a home equity line of credit (HELOC). This type of financing gives you access to a revolving credit line that you can borrow from and pay off repeatedly — similar to a credit card. Just keep in mind that like with a home equity loan, a HELOC is secured by your home — so you risk losing it if you can’t keep up with your payments.
- Borrowing from retirement accounts: Some retirement accounts, like 401(k)s, let you borrow against them. While this option can provide a low-interest solution for immediate financial needs, it’s essential to consider the potential impact on your retirement savings.
Frequently asked questions (FAQs)
How hard it is to get an unsecured personal loan will vary by lender, with some having much more stringent requirements than others. It’s generally more difficult to qualify for an unsecured loan compared to a secured loan. This is because the lender is taking on more risk by providing a loan without collateral as security.
Ultimately, “the key to getting any loan is to show a past history of repaying prior loans and have the ability to pay the new loan,” says Jeffrey Stouffer, a certified financial planner. This typically means you’ll need good credit, verifiable income and a low debt-to-income ratio, which is the amount you owe on monthly debt payments compared to your income.
However, “there are [also] lenders that will accept higher risk profiles,” Stouffer says.
The credit score you’ll need to qualify for an unsecured loan will depend on the lender. Most lenders require good credit — a good credit score is usually considered to be 670 or higher.
There are also several lenders that accept lower credit scores. For example, Universal Credit accepts credit scores as low as 580 while Oportun works with borrowers who have little to no credit. Just keep in mind that bad credit loans usually come with higher interest rates compared to good credit loans.
Like other types of loans, unsecured loans have both pros and cons to consider. For example, they don’t require collateral and generally offer quick access to funds. They can also be used for a wide range of purposes.
However, they often have higher interest rates than secured loans because of the increased risk they pose to lenders. Unsecured loans also typically require good to excellent credit for approval, which could make it hard to qualify if you have bad credit. Additionally, while failure to repay won’t put your assets at risk, it can significantly damage your credit.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
