What is an Unsecured Personal Loan?

February 11, 2019

One reason why some look to personal loans for lending is because of the flexibility that they offer. Unlike a lot of other loan types, personal loans can be either secured or unsecured.

A secured loan is a type of loan where an asset from the borrower is involved, while unsecured loans don’t require an asset for security.

There are a few reasons why some borrowers decide to go with an unsecured personal loan over a secured one. In this article, you will find more details on unsecured personal loans, what they are, and the conditions in which people choose to get one.

What Are Some Characteristics of an Unsecured Personal Loan?

Here are some characteristics of unsecured personal loans, which may be helpful to know before signing up for one:

  • The average interest rates will be around 5% to 36% of the principal amount.
  • The length of the loan can vary from one to five years.
  • The value of the loan ranges widely.
  • The funding from personal loans can be used for almost anything.

What Factors Will Lenders Look at When Giving Out Unsecured Personal Loans?

When it comes to eligibility for unsecured personal loans, lenders will look at a few details about their borrower:

Credit Score

A credit score is what many lenders look at to determine eligibility for unsecured loans. This is because a credit score gives a lender an idea of a person’s financial habits and how they have handled previous lending and credit accounts. As a borrower, it may be helpful to know what that score is before speaking to a lender.

Income

Lenders will definitely factor in a borrower’s income when determining eligibility for an unsecured personal loan. This will show the lender that the loan can be paid back and even help them come up with an appropriate repayment schedule.

Ability to Repay the Loan

Personal loan lenders will factor in a potential borrower’s income along with any other bills, debts, or monthly payments to figure out if the loan can realistically be paid back with the terms of repayment (which both parties will have agreed on).

It is important to keep in mind that these factors will impact more than just eligibility, they will also impact the interest rates, which affect the overall cost of the personal loan.

Where Can I Find an Unsecured Personal Loan?

There are many places that unsecured personal loans can be found. Take a look at two categories of lenders:

Direct Lenders

These are lenders that give out loans themselves, they usually have set rules and requirements of what they expect from their borrowers when determining eligibility. A few examples of these lenders are:

  • Banks
  • Credit Unions
  • Independent Loan Companies

Indirect Lenders

These are lenders that cannot give out personal loans themselves, but instead work with a network of several direct lenders. MaxCash is one of these types of lenders. Indirect lenders tend to offer flexibility with eligibility requirements simply because they have so many different lenders they work with. One can connect with them via:

  • Their Website
  • Their Phone Number

There are advantages and disadvantages to both kinds of lending, and it’s a good idea to check out both kinds before choosing a personal loan lender to work with. For those with good credit, a personal loan should be fairly easy to find, and then the search work just becomes about finding a lender with the most competitive rates.

When to Consider a Secured Personal Loan Instead of an Unsecured One?

The alternative to unsecured personal loans is getting a secured one. A secured personal loan will have an asset involved with it—anything from a home to jewelry. Generally, lenders will ask for an asset to be involved if a potential borrower has less than perfect credit.

A secured loan will have different attributes when compared to an unsecured loan, here are some of those:

  • The interest rates will most likely be higher than unsecured personal loans.
  • The consequences of defaulting on the loan will mean losing an asset.
  • The repayment plan and the personal loan terms may be more rigid.
  • A potential borrower may have to look at several lenders before finding one that deems them eligible.

Those with less than good credit will have a few obstacles that their counterparts may not have to face. However, this does not mean that personal lending is not available to them.

Secured loans are actually designed just for that reason, and so it just becomes about looking at several lenders and then going with the one that offers the most competitive rates.

If a person has looked into personal loans, they may come across unsecured personal loans. Unsecured personal loans are loans that do not require an asset and are mainly available to those with good credit.

There are a few characteristics of unsecured personal loans that potential borrowers should know about. In addition, it may be helpful to know exactly where to find these loans and when a person should think about the alternative to unsecured personal loans.

DISCLAIMER:
The MaxCash website does not offer or provide loans, but rather, it offers a service. It should not be construed as a lending agent or broker. The site does not endorse any lenders and does not charge visitors any fees. The website owners do not evaluate potential lenders’ applications, nor do they approve or deny credit. The MaxCash website does gather applicants’ personal information and transmits it to lenders that are part of the site’s lending network. No one is required to make use of this website, nor are they under any obligation to begin contact with site operators or to attempt to secure a loan with any of the site’s lending partners. Transmission of your financial and personal information on the website in no way obligates lenders to offer you a loan or any other kind of credit product. Be aware that cash transfer times can vary, depending on the lender and the bank you use. It may be necessary to fax information under certain circumstances. All questions about loans, and any concerns you may have should be directed to your lender. These loans are intended as short-term financial solution to satisfy borrowers’ needs for immediate monetary relief. This is not intended to be part of a long-term financial plan for individuals. These services are not offered in all states. Potential borrows may undergo credit check if lenders choose to use any of the major credit reporting bureaus, including Equifax, Trans Union and Experian. They may also use other alternative sources to check credit ratings. Your request for a loan constitutes your agreement and acknowledgement that (A) your personal data may be shared with lenders and perhaps other third-party partners, and (B) lenders can acquire credit bureau reports that detail your credit history. Reports from major credit bureaus, such as Equifax, Experian and TransUnion may be obtained and used to evaluate your reliability as a borrower.

1Loan amounts by the lenders vary based on qualifications.

2Since we do not lend money directly we cannot offer you a solicitation for a loan. In all serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans are not available in all states and all areas.

3Loans such as, Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan. Other types of loans may have pre-payment penalties as well.

4All lenders are responsible for their own interest rates and payment terms. Max Cash has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

5The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you. Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time, in the circumstance for an auto title loan. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically, larger loans or higher risk loans use a GPS.

In some circumstances faxing may be required. Use of your cell phone to receive updates is optional. Please review our privacy policy.

Loans such as Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long-term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

Signature and personal loans are only available in Georgia and Florida. Loan amounts differ at locations. Account approval requires satisfaction of all loan eligibility requirements, including a credit inquiry, and, if applicable, motor vehicle appraisal.

Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

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