Best Unsecured Loans for 2021
Lower risk, speedy payouts, and a simpler application process are all upsides of getting an unsecured personal loan. Of course, as is the case with almost anything in life, there’s an array of options to choose from, and it’s up to you to find the one tailored to your needs. Fortunately for you, the legwork has already been done, and we’ve selected the loan companies that offer the best unsecured loans on the market.
4 Best Unsecured Loans
As far as low-interest personal loans go, offers don’t get much better than the one at LightStream. From low APRs to high loan amounts – there’s not much to dislike. If you have strong credit, you’ll have no trouble getting an excellent deal on unsecured loans for financing pretty much anything you could think of. Read Review
- •Competitive rates
- •Same-day funding
- •No origination fees
Payoff specializes in loans for consolidating credit card debt. Although it’s a shame that its affordable loans can’t be used for a wider variety of purposes, it’s indisputable that Payoff offers some of the best unsecured personal loans on the market. Read Review
- •Low DTI requirement
- •Commitment-free soft credit check
- •Member Experience Team
Prosper is a well-known peer-to-peer lender boasting $17 billion in funded loans. These loans are fully amortized and include no early-payoff penalties. To top things off, Prosper specializes in joint loans, which grant borrowers the opportunity to get the lowest personal loan rates possible. Read Review
- •Lenient eligibility criteria
- •Fast application process
- •A variety of loan types
Avant was named #6 on the Forbes America's Most Promising Companies list in 2015. With its reputable lenders and vastly experienced staff, it’s not hard to see how it got there. If you’re on the hunt for unsecured bad credit loans, then this Illinois-based company should definitely be on your radar. Read Review
- •Easy-to-use mobile app
- •Credit reporting
- •SCRA benefits
Our Methodology for Evaluating Unsecured Loans
With thousands of lenders out there, how can you know that you’ve chosen the right one? Sometimes their offers can seem too good to be true - because they usually are. By sharing our methodology, we hope to provide you with a useful checklist for reviewing unsecured personal loan providers.
Loan terms are the first thing you should look at. This involves examining the personal loan rates, repayment periods, and any fees that you may be charged.
An APR will give you a better idea of what your loan will cost than the interest rate. This is because an APR reflects both the interest rate and the fees associated with borrowing the money. Understandably, you want this number to be as low as possible.
According to Experian’s 2019 research, the average personal loan interest rate is between 6% and 36%. Unsecured loans usually come with slightly higher rates as they don’t rely on collateral.
One of our main concerns was pinpointing lending companies with a variety of loan repayment times. The reason behind this is that there's no perfect time span for everyone. Shorter repayment length will entitle you to a lower interest rate, but the monthly payments might be too high for you to handle, so being able to give yourself a couple more months is of paramount importance.
Lastly, in our book, the best unsecured loans are those that don’t include too many additional charges. A few fees here and there are to be expected, but they should never be unrealistically high or hidden.
To qualify for a loan, you need to meet certain requirements: Their purpose is to ensure you’ll be able to pay back your loan. Therefore, expect your potential lenders to look at your credit score, credit history, and annual income. Aside from these criteria, you will almost certainly have to be 18 or over and a US resident.
Although you might feel like some of these requirements are too strict, they are necessary, especially when it comes to unsecured personal loans as there is no collateral. Luckily, we will tell you exactly what the companies we’ve listed wish to see on their applicants’ loan requests.
No one likes dealing with paperwork, so the faster and easier you can get it all over and done with, the better. Obtaining a loan is already stressful enough - you don’t want an overly complicated application process making it worse.
In this day and age, you can avoid the whole ordeal of going down to a brick-and-mortar lender, too, since there are plenty of lending websites that let you fill out all the necessary paperwork online.
If the unsecured loans you’re considering come with any unique benefits or restrictions, you want to know about it. Does the lender allow you to use the loan for general or only specific purposes? Are there any discounts? Sometimes it’s these small details that tip the scales in favor of a particular lender.
Finally, although customer service may not be as important as lending conditions, repayment times, and other above-mentioned features, it’s still worth looking into. You never know when you might need additional information on any loan-related subject: Being able to get in touch with your lender easily can impact your entire lending experience.
The best loan companies will often have reasonably long working hours and both email and phone support, with knowledgeable and patient support agents. Good educational tools and a quality help center can also be very valuable for quickly finding the answers you need.
Detailed Reviews of the Best Unsecured Loans
LightStream is a division of Truist, which was formed when two highly successful bank holding companies (BB&T and SunTrust Banks) merged. With that in mind, it’s no surprise that LightStream is among the industry leaders in providing personal loans on exceptional terms.
The lowest 5.95% APR is only available with AutoPay; without AutoPay the rates are 0.50% points higher. However, even the slightly steeper APRs are still very affordable. As is usually the case, the best interest rates are only accessible to borrowers with good and excellent credit.
Another commendable aspect of LightStream loans is that they’re completely free of fees, without even a prepayment penalty!
But that’s not all that this lender has to offer. You can borrow up to $100,000 and choose a comfortable repayment period, anywhere between 24 and 84 months.
LightStream’s eligibility requirements are generally reasonable, but they could be strict for some. To get a loan, you’ll need to supply several years of credit history, with multiple account types (e.g. credit cards and car loans). Although there’s no specified credit score condition, a solid rating of around 660 is preferred.
Those that want to obtain LightStream’s top personal loans will also need to have nearly spotless credit reports and be earning enough to manage any existing debts, on top of the new LightStream loan.
If you apply for a loan during LightStream’s working hours, you’ll be presented with your loan options within a very short time. In fact, you could receive your funds the very same day, should you find the time to go over and e-sign your loan agreement, as well as forward all relevant information to the company by 2:30 PM during banking business days.
LightStream has a superb yet uncommon business policy: if you feel like you haven’t had the best personal loan experience, you’ll receive $100. This guarantee is valid for 30 days after you receive your loan.
Let’s not forget to mention that you can use your loan for financing home improvements, weddings, timeshares, and various other purposes.
Potential and active borrowers can find an extensive FAQ page on LightStream’s website, but if there’s anything that they are unable to find, they can contact the customer care team via email Monday through Friday from 9 AM to 8 PM and on Saturdays from 12 PM to 4 PM EST.
Though they have business hours on Saturday, unlike some of the best lending companies, LightStream doesn’t offer phone support on the weekend.
Reasons to Apply:
- Easy application process
- Same-day funding
- $100 guarantee
Payoff is a financial service company founded in 2009. It presents a safe platform for borrowers and lenders to connect. Many credit card debt holders with good and fair credit have found it to be their best option for online loans.
Payoff’s loans are quite budget-friendly overall, thus placing them among the best unsecured debt consolidation loans we could find. The only fee that you should be aware of is the one-time origination fee ranging between 0% and 5%.
The maximum loan amount is $40,000, which is less than what LightStream offers but is still pretty decent. The repayment period is quite generous as well, between 2 and 5 years.
Firstly, you need to have a FICO score of 640 in order to take out a loan through Payoff. Secondly, there shouldn't be any delinquencies on your credit reports, since lenders want to see that you’re financially responsible.
Aside from these two main conditions, your debt-to-income ratio, credit history, previous and current lines of debt, and utilization will be examined. For the best unsecured loans, you will usually need a DTI that's below 36% but, according to our research, Payoff is likely to consider you as long as your DTI is under 50%.
If you’re still shopping around for loans, you might want to check your rate on the company’s website. Payoff will do a soft check, which won’t affect your credit score. If you’re satisfied with the terms offered to you, there are just a few more easy steps to complete and get your low interest personal loan.
Payoff members are rewarded with free FICO score updates, which you’ll definitely be happy to receive. Based on Payoff’s study conducted between August 2019 and February 2020, most Payoff members who repaid at least $5,000 in credit card balances witnessed their credit score go up by approximately 40 points.
Another noteworthy thing about this company is that it has a Member Experience Team dedicated to making your first year as a Payoff client as pleasant as possible. Along with access to Member Advocates, you’ll be able to undergo scientific personality, stress, and cash flow assessments.
Not only does Payoff provide some of the best unsecured loans for debt consolidation but it also has a first-rate customer service department. Friendly customer care representatives are on stand-by, Monday–Friday from 6 AM to 6 PM and Saturday–Sunday from 6 AM to 3 PM (PST), ready to answer all your questions. You can use the phone, email or live chat – whichever suits you the most.
It may not be the most comprehensive one you’ll come across, but a decent amount of information is available on the Support page as well.
Reasons to Apply:
- Low DTI requirement
- Commitment-free soft credit check
- Member Experience Team
Ever since Prosper was launched in 2005, it has maintained a reputation for helping its customers acquire fast and easy personal loans. And this P2P marketplace must be doing a good job too, seeing as how more than a million borrowers have chosen it as their go-to place for personal loans.
APRs for Prosper’s unsecured fixed-rate loans currently range from 7.95% to 35.99%. There are several fees you should know about before committing to one of them, though: the origination fee of 2.41% – 5%, the $15 insufficient funds fee, and a late fee (for loan payments that are 15 or more days late) that can be either 5% of the unpaid amount or $15 (whichever is greater).
Out of all the unsecured loan providers we selected for our list, Prosper has the fewest loan length options available: either three or five years. However, it will let you borrow as little as $2,000.
What truly puts Prosper ahead of the competition is its fairly lenient eligibility criteria. To apply for a loan, you just have to have an income; there’s no minimum, and your debt-to-income ratio can’t exceed 50%. In addition to that, you’ll also need a credit score of at least 640, less than 5 credit inquiries within the last 6 months, at least 3 open trades, and 0 bankruptcies within the last 12 months.
Due to these relatively loose conditions, many consider Prosper’s loans to be the best unsecured loans for poor credit, and we can’t help but agree.
Submitting a loan application through Prosper is as easy as ABC and completing the process takes just a couple of minutes. The interface is very user-friendly and even the not-so-tech-savvy clients should have no trouble with it.
Prosper allows you to take out a joint loan. This is a perk you should seriously consider because a co-signer with good credit can increase your chances of approval and get you better loan terms.
Prosper offers a vast variety of loan types. If you’re in the market for some of the best unsecured business loans for a small business, engagement ring financing, or just need a few extra dollars to go green, then this service is perfect for you.
Prosper has both email and phone support, but neither is available during weekends. If you have any questions you’d like to ask the customer care team, you’ll need to do it between 8 AM and 6 AM EST from Monday to Friday. Before you contact them, you might want to explore Prosper’s extensive help center and informative blog section first.
Reasons to Apply:
- Lenient eligibility criteria
- Fast application process
- A variety of loan types
Avant is a relatively new company that provides unsecured loans for bad credit from WebBank – an FDIC-insured, state-chartered industrial bank. Its near-constantly available customer support, low credit score requirement and flexible repayment options have earned it a 4.7 score on Trustpilot.
This company’s APRs are slightly higher than average, but they’re far from unmanageable. Borrowers that aren't certain that they’ll be able to make their upcoming loan payment can even call customer support and change their due date.
Avant’s loan lengths are fair and the amounts are standard compared to other lenders and lending platforms. The company is quite transparent when it comes to its business operations, as all best personal loan companies should be, so as its customer, you’ll be duly notified about its three fees.
You’ll be charged up to 4.75% for the administration fee, $25 for loan payments late more than 10 days, and $15 for unsuccessful payments.
With Avant, you won’t have to worry about your eligibility. Although Avant doesn’t publicly disclose its credit score or minimum income requirements, an estimated credit score of around 580 and a gross annual income of at least $20,000 should be enough to get you started.
Avant provides quick personal loans that you’ll usually receive the following business day after approval. To get approved, you’ll need to complete the application and verification process, which fortunately won’t take up much of your time.
Avant is chock-full of unique features and we’re not just talking about the numerous loan types it extends to its customers. First of all, you can download the Avant app from both Google Play and App Store, which allows you to control your personal loan account on the go.
The second feature we’d like to direct your attention to is one of the main reasons why we deem these the best unsecured loans for bad credit. As a result of Avant’s diligent credit reporting to all three credit bureaus (Equifax, Experian, and TransUnion), your timely payments will be rewarded with a credit score boost.
The last feature we feel compelled to introduce you to is the opportunity to apply for SCRA benefits. The SCRA (Servicemembers Civil Relief Act) provides lending protection for military personnel who are called to active duty. These clients are eligible for loan interest rates that don’t exceed 6% and won’t be charged any late or non-sufficient funds fees during active service.
If Avant’s unsecured personal loans for bad credit seem tempting to you, you’ll be happy to know that you can find out any additional details about them by calling or emailing the customer support agents available every day of the week. They can be reached Monday–Friday from 7:00 AM to 10:00 PM Central and Saturday–Sunday from 7:00 AM to 8:00 PM Central.
You can also find plenty of tips and instructions on Avant’s blog and FAQ page. Both are well-organized and contain easy-to-understand content.
Reasons to Apply:
- Mobile app
- Credit reporting
- SCRA benefits
Fortunly’s Guide to Unsecured Loans
What is an unsecured loan and is it right for you? An unsecured personal loan, as opposed to a secured personal loan, provides borrowers with the opportunity to take out a loan without having to provide collateral. Whether you should acquire this type of personal loan depends solely on your financial circumstances.
However, to help you better understand them and perhaps assist you in making a decision, we’ll go over the pros and cons of personal loans without collateral.
No Risk to Personal Property
The main reason people of all financial means choose to get an unsecured loan is because there is no risk to their personal property. Many in need of a loan are hesitant to get one for fear of having their home, car, or any other valuable asset taken away. Unfortunately, if they happen to lose their income and consequently aren’t able to make their monthly payments, the odds of that happening with a secured loan are very high.
Simple Application Process
Since you aren’t required to submit as many documents as you would be if you were applying for a secured personal loan, the turnaround time on unsecured loan applications tends to be a lot faster and simpler.
Good Loan Terms
Borrowers with good or excellent credit scores can qualify for rates rivaling those for secured loans. Keep in mind that credit score ranges differ depending on the credit score model, so you should make sure to check your potential lender’s loan application requirements.
Risky for Lenders
A loan without collateral entails more risk for lenders. In order to ensure that they’ll make a profit, they’ll usually offer higher unsecured loan rates and smaller loan amounts. As we’ve already mentioned, borrowers with exemplary credit scores will most often be able to find perfectly reasonable loan conditions, but those with poor or bad credit might have to settle for less favorable ones.
If you fail to repay your loan within the agreed-upon time period, a lender may take legal action against you. This happens in worst-case scenarios but you should try and avoid them at all costs. After all, the last thing you need in such a situation is to worry about attorney fees and court costs.
Lenders aren’t interested in long costly trials either, so you should always try to negotiate with them. The best personal loan lenders will most likely be willing to extend your loan repayment term or create a repayment plan for you. Some plans involve pausing your monthly payments or letting you pay back your debt with reduced or no interest. If you are unable to come to an agreement with your lender, you might want to think about asking your friends and family for help.
No loan is risk-free but that doesn’t mean that they are something to fear. It’s true that even the best loans have their downsides, but if you’ve done the necessary prep, like evaluating your finances and determining which loan terms you’d be able to handle, you shouldn’t have any trouble managing your payments, barring unforeseen circumstances.
The highest unsecured loan you’ll be able to get is usually $40,000 or $50,000, with a few lenders such as LightStream offering up to $100,000. Of course, to qualify for the highest amounts, you’ll have to present your lender with an exceptional credit score.
Avant offers some of the best personal loans for poor and bad credit. We suggest taking a look at Prosper and Payoff as well, as they have relatively low credit score requirements.
APRs ranging between 6% and 36% are usually considered good for an unsecured loan.
Due to its highly favorable loan terms, LightStream can definitely be deemed as the lender with the best no-collateral loans for those with a good credit score. For more information on this lender and others similar to it, we would recommend that you read our best unsecured loans article.