What Types of Loans Don't Require Collateral?

Learn about unsecured loans and what types don't require collateral. Find out more about Wells Fargo personal loans and other options.

What Types of Loans Don't Require Collateral?

An unsecured loan is a type of loan that does not require any form of collateral. Instead of relying on a borrower's assets as security, lenders approve unsecured loans based on the borrower's creditworthiness. Examples of unsecured loans include personal loans, student loans, and credit cards. These loans do not require collateral such as a house or car for approval. Rather than collateral, lenders issue these loans based on information about the borrower, such as their credit history, income, and outstanding debts.

Unsecured loans come with interest and sometimes fees, but they do not require any form of collateral. Student loans, personal loans, and credit cards are all examples of unsecured loans. Wells Fargo personal loans are a great option for those looking for a wide range of loan amounts and flexible terms. However, borrowers cannot prequalify for these loans. Unsecured loans can be installment loans, such as unsecured personal loans, or revolving lines of credit, such as unsecured credit cards.

Since they require collateral, they usually have more competitive interest rates than unsecured loans. SoFi offers online personal loans with consumer-friendly features for borrowers with good and excellent credits. With unsecured loans, lenders do not require you to present items you own as collateral to qualify for the loan. It is important to know how long it will take to repay the loan and how much the total borrowing cost adds up when you factor in interest and fees. Multiple types of accounts within your credit history can be taken into account when applying for an unsecured loan, such as credit cards, car loans or other installment loans and a mortgage. Marcus Unsecured Loans can be used for many types of expenses, including debt consolidation, a wedding, or a big move. Upgrade offers loans for credit card refinance, debt consolidation, home improvement projects and large purchases.

If a borrower becomes unemployed and cannot repay their unsecured personal loan or unsecured credit card debt, the lender cannot keep their property. Laurel Road offers medium to large online loans with an automatic payment discount, minimum rates and special conditions for healthcare professionals. Once an unsecured personal loan is approved, borrowers can expect to receive their funds within one to two business days via direct deposit. Depending on various factors, loan offerings may require guarantees or high interest rates if the bank considers an applicant's profile to be unsound. A personal line of credit is a type of revolving credit account that allows you to borrow a sum of money (up to a certain amount) and pay it off over time.