When you need to finance a large expense but don’t feel comfortable backing a loan with personal assets, an unsecured loan — which doesn’t require collateral — may be the way to go. The best unsecured loans offer low interest rates and fees, a range of terms, fast funding, and great customer service.

Credible evaluated the best personal loan lenders for unsecured loans based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, 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.

When looking for the best-unsecured loans, it’s important to compare different options to find the right one for you. As you research, pay attention to the following: 

Since unsecured personal loans don’t require collateral, eligibility requirements tend to be stricter than those for secured loans. 

Generally, lenders require, at a minimum, that you be the age of majority in your state and have a physical and email address. In many cases, you must also be employed or soon-to-be employed — or receive income from another source. 

Depending on the lender, you’ll see some other eligibility requirements:

While these eligibility requirements are somewhat standard, lenders can and do take your entire financial situation into account. Having a certain credit score, for example, may not make or break your ability to qualify for a loan. 

Getting an unsecured personal loan is usually a straightforward process if you meet a lender’s eligibility criteria. The process varies by lender, but you’ll go through the following steps:

1. Check your credit: Your credit will have an influence on the loans you can qualify for, so it’s smart to know your score ahead of time. If your score isn’t great and you’re not in a hurry to get your loan, it may be worth trying to improve your credit — by paying off some credit card debt, for example — before applying for a loan. 
2. Compare lenders: Research different lenders and compare them based on APRs, available terms, eligibility requirements, and customer satisfaction. 
3. Apply for a loan: Choose your loan and apply online or in person. You’ll typically need documentation proving your identity, address, income, and employment. If you have a cosigner, they’ll need to provide their information, too.
4. Finalize the loan and begin payments: Once approved, you’ll need to formally accept your loan — that is, sign the paperwork. Then you’ll receive the funds in your bank account within a couple of days to a week. Your payments will start right away, so enroll in autopay or mark your calendar to pay the monthly installments manually. 

Since unsecured loans are tougher to qualify for, you may have trouble securing one if your credit is not ideal. If that’s the case, you aren’t out of options. Always start by checking your credit report for any mistakes and to see where there’s room for improvement. Then try one or more of the following in order to improve your chances of approval: 

As with any financial product, there are pros and cons to consider when it comes to unsecured loans. 

Unsecured loans tend to be riskier for lenders because there’s no collateral involved. In other words, lenders have less of a guarantee they’ll be repaid. 

For the borrower, the best-unsecured loans can be less risky because you don’t have to back your loan with any of your personal assets. On the other hand, this makes unsecured loans more difficult to qualify for. Unsecured loans typically have higher interest rates and stricter eligibility requirements, too.

Most personal loans and credit cards, as well as student loans, are considered unsecured loans. These loans don’t require collateral to qualify — borrowers have to meet other eligibility requirements. Note that secured personal loans and secured credit cards do require collateral.

You may be able to get an unsecured loan with bad credit. Every lender has different policies, and some lenders are more willing to work with borrowers who have bad credit. The downside is they may charge you a higher interest rate to borrow. Another option is to apply for a loan with a cosigner, which can increase your chances of qualifying with bad credit.

Secured loans include mortgage loans, home equity loans and lines of credit, and auto loans. They each require collateral — in the first two examples, your home, and in the third, your car. However, personal loans and credit cards, which are typically unsecured loans, can also be secured. That simply means they’re backed with some sort of asset, like cash or a vehicle. 

Unsecured loans can be used for almost anything. Some common uses for personal unsecured loans include emergency expenses, weddings, vacations, debt consolidation, IVF or family planning, and more. When it comes to things like college education, vehicles, and houses, however, it makes more sense to go with a secured loan because they tend to have lower interest rates.