Unsecured Loan

Unsecured loan summary:

  • Unsecured loans don’t require collateral. That means you’ll qualify based on your creditworthiness and financial situation, not whether you own something valuable you could use as a guarantee.

  • Unsecured loans are riskier for the lender, so they tend to cost more than secured loans.

  • Common examples of unsecured loans are student loans, most personal loans, and most credit cards.

Unsecured loan definition and meaning

An unsecured loan isn't guaranteed by collateral. There's nothing the lender could take and sell if you don't make your payments. The lender's only security with an unsecured loan is your promise to repay. For this reason, unsecured loans are sometimes called signature loans. Because unsecured loans are riskier to lenders than secured loans, they can be harder to get and their interest rates are usually higher. 

More about unsecured loans

When you borrow with an unsecured loan, you don't put up collateral. That means there’s nothing the lender could take, or repossess, if you don't repay your balance according to the terms of your loan agreement. The lender would have to come after you for repayment by contacting you, turning your account over for collection, selling your debt, or suing you. 

Advantages of an unsecured loan

The biggest advantage of an unsecured loan is that you don’t have to own anything of value that you could borrow against. Also, unsecured loans can be much faster to get because there’s no collateral to evaluate. 

Disadvantages of an unsecured loan

Unsecured loans have a couple of drawbacks. They can be more difficult to get if your credit score is low or your income is unstable. 

Unsecured loans are riskier for lenders, because there’s no collateral for them to take and sell if you don't repay the loan. To recover what they're owed, lenders could contact you, turn your account over to collections, or possibly sue you. These strategies can be time-consuming and expensive with no guarantee of success. That’s why unsecured loans generally carry higher interest rates compared to secured loans.

Common types of unsecured loans

PERSONAL LOANS

Consolidate debt with a personal(ized) loan

Simplify your life—consolidate your debts into one fixed monthly payment.

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Personal loans are available through our affiliate Achieve Personal Loans (NMLS ID #227977), originated by Cross River Bank, a New Jersey State Chartered Commercial Bank, Equal Housing Lender. Loan applications are subject to credit review, underwriting criteria, and approval. Loans are not available in all states and available loan terms/fees may vary by state. Loan amounts range from $5,000 to $50,000. For loans $35,000+ must have a minimum 660 credit score. APRs range from 8.99% to 29.99% and include applicable origination fees that vary from 1.99% to 8.99%. Repayment periods range from 24 to 60 months. Example loan: four-year $20,000 loan with an origination fee of 8.99%, a rate of 15.49%, and corresponding APR of 20.77%, would have an estimated monthly payment of $561.60 and a total cost of $26,966.26. To qualify for a 8.99% APR loan, a borrower will need excellent credit, a loan amount less than $12,000.00, and a term of 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to pay off qualifying existing debt directly; or showing proof of sufficient retirement savings, could help you also qualify for lower rates. Loan Consultants for Achieve Personal Loans are available Monday-Friday 6 AM to 8 PM AZ time, and Saturday-Sunday 7 AM to 5 PM AZ time.

Home Equity loans are available through our affiliate Achieve Loans (NMLS ID #1810501). Equal Housing Opportunity. Offers may vary and all loan requests are subject to eligibility requirements, application review, loan amount, loan term, income verification, and lender approval. Product terms are subject to change at any time. Offers are a line of credit. Loans are not available to residents of all states and available loan terms/fees may vary by state where offered. Line amounts are between $15,000 and $300,000 and are assigned based on product type, debt-to-income ratio and combined loan-to-value ratio. 10, 15, 20, and 30-year terms available. Minimum 600 credit score applies for debt consolidation requests (20 and 30 year terms require a minimum credit score of 640), minimum 700 applies for cash out requests. Other terms, conditions and restrictions apply. Fixed rate APRs range from 6.74% - 14.75% and are assigned based on underwriting requirements and offer APRs assume automatic payment enrollment which may provide a discount (autopay enrollment is not a condition of loan approval). All terms have a 5-year draw period with the remaining term being a no draw period. Payments are fully amortized during each period and determined on the outstanding principal balance each month. Closing fees range from $750 to $6,685, depending on line amount and state law requirements and typically include origination (3.5% of line amount) and underwriting ($725) fees if allowed by law. Property must be owner-occupied. Combined loan-to-value ratio may not exceed 80% (20 and 30 year debt consolidation requests may not exceed 75%), including the new loan request. Property insurance is required and flood insurance may be required if the subject property is located in a flood zone. You must pledge your home as collateral. Loan funding time is dependent on full application and documentation submission, average funding time is 11 business days for 2025, including rescission. Monthly/yearly savings claim is based on average monthly debt savings from originated loans for Q4 2024. Monthly/yearly savings varies based on each loan situation and can be more or less than $800/$10,000. Requirements to obtain 6.74% APR include: debt to income ratio <=15%; cumulative loan to value <= 40%, including new request; loan amount between $15,000 and $150,000; term of 10 years; FICO of 800+; and automatic payment enrollment. Contact Achieve Loans for further details

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