Unsecured personal loans don’t require collateral. We have found many unsecured loans that approve people with very low credit score. Unsecured loans should be your first step. Before searching for secured options and all other alternatives, try and see what unsuecured loans would offer you.

To find a complete list of all unsecured loans and a complete guide, visit our best personal loans for bad credit of January 2026.

Best Unsecured Personal Loans of January 2026

When shopping for a personal loan, one of the most important decisions you’ll make is choosing between a secured and an unsecured loan. Both options have their own advantages and disadvantages regarding interest rates, loan amounts, and repayment terms, depending on whether you put up collateral.

If you have less-than-perfect credit, you must understand the difference. Whether you’re considering OneMain Financial for a secured loan or platforms like Upstart or Avant for an unsecured loan, choosing the right one can make or break your monthly budget.

Why Should I Trust ElitePersonalFinance

At ElitePersonalFinance, understanding the difference between secured and unsecured loans is fundamental. Our guides take a deep dive into legit unsecured and secured loan options at top lenders like Wells Fargo, Capital One, Navy Federal, Avant, and Upstart, as well as lesser-known options you can trust.

Keep reading to learn more about the best secured personal loans, including a breakdown of secured versus unsecured loans, how putting up collateral works, which type benefits your financial goals, and answers to the most frequently asked questions to help you make the best lending decision possible.

Secured vs Unsecured Loans

When looking for a personal loan, one of the first things to learn is whether it is secured or unsecured. Whether it’s interest rates, loan amounts, or repayment flexibility, there are differences between the two. Each has its own advantages and disadvantages, and the right choice depends on your overall financial situation, how much you’re able to repay, and whether you’re willing to put up a vehicle, savings account, or certificate of deposit as collateral.

Secured Loans

Secured loans require collateral, which is what you’re running the risk of losing in case of loan default. Some of the most popular types of collateral include a vehicle, a savings account, a certificate of deposit, or even a piece of property. They generally come with lower interest rates than unsecured loans, as well as higher borrowing amounts and longer repayment terms.

However, if you fail to repay the loan, you risk lenders seizing and selling your assets to recover the money.

Here are three popular secured loan options you may want to consider:

OneMain Financial Secured Loan

One of the most popular providers of secured personal loans in the U.S., OneMain Financial offers borrowers the option to use a vehicle or savings account as collateral, allowing them to take out as little as $1,500 and as much as $20,000 with APRs ranging from 10.99% to 35.99%. Repayment terms vary from 24 to 60 months, giving you greater flexibility and the option to structure your monthly payments.

Not to mention, on-time payments are reported to all three major credit bureaus, making it a win-win in our book.

Wells Fargo Secured Personal Loan

Arguably a top-three bank in the country, Wells Fargo offers secured personal loans collateralized by a savings account or certificate of deposit (CD), with loan amounts from $3,000 to $50,000, making it an excellent choice for large-scale expenses like home renovations and weddings.

Well-qualified borrowers can start with an APR as low as 7.74% and repayment terms up to 84 months.

Credit Union Secured Loan (e.g., Navy Federal)

Using a savings account or CD as collateral, Navy Federal Credit Union offers secured loans ranging from $1,000 to $50,000, with repayment terms of 12 to 72 months.

Note: Navy Federal is exclusively for retired and active military personnel and their families, as well as those in service at the Academies and officer training.

Unsecured Loans

Unlike secured loans, unsecured loans do not require any collateral. They are based on factors such as your income, credit score, and cash flow history. To offset the risk, unsecured lenders charge higher interest rates, offer smaller loan amounts, and impose shorter repayment terms.

Different types of unsecured loans include online installment loans, payday alternative loans (PALs) from credit unions, and peer-to-peer (P2P) lending through marketplaces like Prosper.

Here are three popular unsecured loan options you may want to consider:

Upstart Unsecured Personal Loan

Thanks to its AI-driven underwriting system, many borrowers have enjoyed greater flexibility with Upstart unsecured personal loans, which allow you to borrow between $1,000 and $50,000 at APRs from 7.80% to 35.99%, along with repayment terms of 36 to 60 months.

In addition to your credit score, Upstart also considers your education and employment history. Plus, one can expect instant approval decisions with funding deposited to your checking account as early as the next business day. No risk of losing assets like vehicles or savings accounts here!

Avant Unsecured Loan

If you have fair to poor credit, then Avant unsecured loans are a viable option. Loan amounts range from $2,000 to $35,000, with APRs ranging from 9.95% to 35.99%. Repayment terms are also from 24 to 60 months, allowing you to choose the ideal length to meet your monthly cash flow needs.

One of the best things about Avant is its digital-centric approach, easy-to-use platform, and the ability to change your payment date once a year in case you ever get caught in a buying spree.

One of the most helpful things about Avant is its innovative dropdown on the https://www.avant.com/personal-loans/ page, which lets you see loan amount ranges, terms, and APRs you might be eligible for in any state. For example, Alabama residents are offered loans of $2,000 to $35,000 with repayment terms of 24 to 60 months, vs. comparable terms in other states.

Upgrade Unsecured Loan

With more than 7 million customers and $40B borrowed, Upgrade offers unsecured loans ranging from $1,000 to $50,000 with APRs between 8.49% and 35.99% and repayment terms from 24 to 84 months, one of the most extended ranges we’ve come across.

Plus, it doubles as a complete personal finance platform, letting you take advantage of cash back, banking, and flexible spending tools. The Rewards Checking account gives customers up to 2% cash back on everyday debit card purchases, and it also offers a competitive 3.05% APY on savings, which beats traditional banks.

Other options include the Upgrade OneCard, Life Rewards Card, and Cash Rewards Card, each offering up to 3% cash back depending on your spending category. It even has a built-in Buy Now, Pay Later option using Flex Pay.

For ElitePersonalFinance’s complete guide on what to do once you get a personal loan, visit

How to Pick the Best Personal Loan for Me?

Selecting the best personal loan can feel overwhelming, especially when you’re considering APR ranges, repayment terms, different loan types, and even the fine print.

Here’s a step-by-step guide on how to pick the best personal loan:

Compare APRs and Total Cost of Borrowing

One key criterion is your annual percentage rate, which is the actual cost of borrowing over time. Even a slight difference of 7% can mean you can save hundreds of dollars over the life of an $8,000 loan. All of our recommended lenders show a clear, up-front APR range so you know what to expect based on your credit history, income, and other qualifying factors.

Remember, higher APRs may be better than lower APR loans if there are no hidden fees involved.

Plus, you should pay attention to how rates change depending on the loan amount and repayment term. Expect lower APRs with shorter terms, but higher monthly payments, whereas longer repayment terms charge more in interest but offer more manageable monthly payments. That’s why we recommend using a loan calculator to understand what you’ll be paying every month.

Look into Repayment Terms

Expect to have anywhere from 6 months to 60 months to pay off your loan. If you want to get out of debt quickly and minimize interest, go for shorter repayment terms. However, longer terms will cut into your monthly payments but increase the total amount of interest paid. Be sure to find the right balance based on your debt-to-income ratio and your ability to repay all of your outstanding obligations every month.

What Is APR?

APR stands for annual percentage rate, which is the actual cost of borrowing money and incorporates not only the interest rate but also all lender fees, including origination and application fees. If your loan has a low interest rate but a 9% origination fee, the total APR can be higher than a loan with a 1% bumping interest rate and no cost, so we always encourage you to avoid “low rate” marketing.

Keep in mind that not all fees appear in APR calculations. For example, late payments and insufficient funds fees are not shown.

As a best practice, you should always check how APR affects total loan costs. One of the best tools you can use is an APR calculator, which estimates the total loan cost based on the interest rate, origination fees, and other details.

All in all, minor APR differences can add up to thousands of dollars over time. Lower monthly payments don’t always mean a loan is cheaper.

What Are The Expected Rates?

The typical rates you should expect to pay depend on your credit score.

Borrowers with excellent credit can expect to pay in the 8% to 12% APR range, versus 14% to 20% for good credit and 22% to 35.99% for fair to poor credit.

Keep in mind that 35.99% APRs are representative thresholds for bad-credit borrowers. It’s the highest APR mainstream installment lenders can collect. If legit lenders exceed this limit, they may be subject to disciplinary action, such as fines and the loss of their lending license.

Of course, these numbers vary depending on the lender and loan type. However, the same rule applies: the higher the borrower’s credit score, the higher the rate. That’s why we recommend raising your score by as little as 30 points before applying, so you can enjoy lower APRs and get out of debt faster.

Loan Fees Explained

No matter where you’re looking at personal loans for marketplaces like MoneyMutual, SuperMoney, PickALender, or Upgrade, below are the most popular loan fees you may pay with your next personal loan:

Origination Fees

Origination fees are among the most common personal loan fees, especially with Upstart, Upgrade, and Prosper. Expect to pay anywhere from 1% to 12%, depending on your credit score, the lender, and the type of loan you choose. For example, Upstart may charge an origination fee of up to 12% if you have bad credit, while Prosper’s peer-to-peer investors can charge you up to 7% depending on your quality score. Remember, a 10% origination fee on a $10,000 loan means you only get back $9,000 in proceeds (but you will owe the full $10,000 plus accrued interest).

Prepayment Penalties

Most of our recommended lenders do not charge prepayment penalties; very few do (MoneyMutual is one of them). Expect these charges on payday-style installment loans rather than standard fixed-term personal loans. Charges usually go anywhere from $20 to $50 or a percentage of your remaining interest. Be sure to review all the disclosures for prepayment penalties before accepting any loan.

Late Payment Fees

One of the most common charges with personal loans, late fees can go anywhere from $15 to $40 or a percentage of the unpaid balance. For example, you will pay $15 or 5% of the unpaid amount with Prosper loans, versus a flat fee with Upgrade. If you miss multiple payments, these fees could add up quickly.

Note that SoFi and HappyMoney do not charge any late fees. However, missing payments will continue to drop your credit score.

NSF Fees

Also known as insufficient funds or return payment fees, these fees are incurred when your bank declines an automatic withdrawal. Whenever a payment bounces, lenders may charge between $15 and $35 to cover the failed transaction.

One of the best ways to avoid these fees is to change your payment date to a day when you know you’ll have sufficient funds in your checking account.

Check Processing Fees

In rare cases when you try to issue a paper check instead of an automatic withdrawal, your lender may charge a check-processing fee, typically $5 to $15 per mail check. These are most common with smaller, lesser-known lenders such as MoneyMutual, PickALender, ZippyLoan, and NextDayPersonalLoans.

Do not expect any check fees with Upstart, SoFi, Upgrade, Prosper, or HappyMoney, since they rely on automatic online payments. Note: SuperMoney will also make it easy to see whether your lender accepts checks. We always recommend paying by ACH transfer.

Document Fees

Anytime lenders request copies of loan agreements, payment histories, or verification letters, you may be charged a $5 to $20 document reproduction fee. This has specific use cases, particularly in tax preparation or bankruptcy proceedings, and it’s not at all common.

Luckily, some of our top-rated lenders, like Upstart and Upgrade, do provide digital document storage at no extra cost.

Loan Extension/Rollover Fees

Popular with payday loans, loan extension fees let you get extra time to make a $10 to $30 payment. Note that there’s usually a cap on the number of extensions you can take out per loan, but we recommend avoiding extensions, as they will increase your total debt.

Keep in mind that lenders like SoFi now offer ways to avoid ever taking a loan extension, with unemployment protection and hardship programs that can help borrowers without charging extension fees. Plus, you can adjust your payment as your circumstances change.

Plus, it’s essential to check that your lender offers early repayment with no prepayment penalties. If you get a bonus, tax refund, or extra income, you don’t want to be penalized for your good luck.

Fees and Fine Print

With any loan, always make sure they do not include origination fees, late payment fees, returned payment fees, paper statement fees, or loan processing charges that do not offer any material value to the loan. Some lenders charge origination fees of up to 10% on the loan amount, which can cut into your loan proceeds.

Fortunately, most of our recommendations don’t charge origination fees, and it’s easy to pick lenders on marketplaces that don’t charge them.

Funding Speed

Whether it’s a car repair, vet bill, or medical need, speed is the name of the game. Fortunately, many of our recommended options, such as MoneyMutual, now offer same-day or next-business-day funding, depending on when you submit your application. As always, never fall into the trap of “instant payday loans” or “same-day approval”.

Check Eligibility Requirements

Many factors go into determining your eligibility, including income, employment status, existing debt, and credit score. Many of our recommended lenders specialize in borrowers with bad credit and evaluate based on your income, employment level, and other criteria outside your credit score.

By aligning your profile with the right lender, you will save time and reduce headaches.

Consider Lender Reputation

One of the determining factors in choosing the right loan should be the lender’s reputation. We currently consider transparency non-negotiable, meaning the fine print should clearly outline APR ranges, repayment terms, and other borrowing conditions before applying. One of the good things about our guide is that we only recommend legit companies.

For example, MoneyMutual is a member of the Online Lenders Alliance (OLA), meaning it has agreed to strict consumer-first standards and avoids predatory lending practices.

Match Loan Purpose With Loan Type

Are you looking to consolidate high-interest debt? What about covering an emergency cash gap? For the former, take out a longer-term, lower fixed-rate installment loan rather than a paycheck advance app. Understanding the purpose of your loan will help you avoid overborrowing.

All in all, carefully comparing APRs, choosing the right repayment terms, watching for hidden fees, and verifying funding speed, along with our recommendations, will put you on the fast track to finding the best loan for you.

Where Can I Use My Personal Loan?

Here’s a quick list of 10 things you can use your personal loan for.

• Unpaid medical bills
• Consolidating high-interest credit cards
• Urgently needed plumbing, roofing, or HVAC replacement
• Home renovation projects
• Automotive repairs
• Buying a used vehicle
• Emergency expenses
• Rent or security deposits
• Funeral expenses
• Wedding costs

Note that this is not an all-inclusive list, as personal loans from our top-rated lenders like MoneyMutual can be used for virtually all types of expenses, as long as you manage a healthy repayment plan and do not take on more debt than you can afford.

Will Checking My Rates Affect My Credit Score?

When you check your rates through our recommended marketplaces and direct lenders, initial inquiries will require a soft credit check, which does not affect your credit score. It simply estimates your eligibility and provides expected APR ranges, repayment terms, and other loan details. That’s why we’re big fans of pre-qualifying and of comparing offers.

In turn, moving forward with a specific lender and applying will trigger a hard credit inquiry, which will temporarily drop your score by a few points. However, online marketplaces like SuperMoney allow you to avoid multiple hard pulls across different lenders by enabling easy comparison shopping and consolidating all loan offers into a single soft check.

In short, pre-qualification checks are soft inquiries, whereas a hard inquiry occurs only after you choose a lender and submit an application.

How to Find Legitimate Unsecured Personal Loans and Avoid Scams?

Here are three of our favorite tips on how to find legit personal loans and avoid scams:

All About Clear Disclosures

The first step is always to ensure that your lender or marketplace is legit by checking to see whether they have a license to do business in your state. Online marketplaces like MoneyMutual, SuperMoney, PickALender, ZippyLoan, or NextDayPersonalLoans will always provide information about partner lenders and links to their direct terms.

Be sure to check the Consumer Financial Protection Bureau (CFPB) and the Better Business Bureau to see if any actions have been taken against the lender.

We also recommend checking third-party review sources, such as Trustpilot, Google, and fintech review sites, to ensure customers are not complaining about a recurring issue, such as unexplained fees or a promise of guaranteed approval. Legit lenders will also never demand payment before dispersing funds, nor will they ever ask you to pay a portion of the debt using gift cards or similar methods.

Compare Rates, Fees, and Prequalification Terms

Always be sure to read your loan offers in their entirety. We highly recommend pre-qualifying with a self-credit check using platforms like SuperMoney or PickALender so you can compare loan offers side by side, including APR ranges, repayment terms, origination fees, and more. Don’t just look at the APR; use APR calculators to estimate your total interest paid over the life of the loan based on the number of months. If you want to see principal versus interest over time, ask for an example amortization schedule.

Remember that reputable, legit platforms will always allow you to perform self-checks, with a hard inquiry triggered only when you apply.

Apply Safely

We recommend applying only to secure sites with HTTPS and a lock icon. Never share your personally identifiable information via unsecured email, such as pay stubs and bank statements. In rare cases, you will have to submit your full Social Security card or extra photos.

Remember to save copies of your loan disclosures before you sign, and keep a paper trail handy by downloading the loan agreement and keeping a record of all your payments.

Watch Out for Marketing

If you see commonly used scam phrases like “guaranteed approval,” “bad credit guaranteed,” “no credit check ever,” run. Always know that legit lenders will always check for your ability to repay by verifying your identity and income. Note that online marketplaces like MoneyMutual cannot even guarantee approval or the maximum loan amount, because each participating direct lender makes its own underwriting decisions.

Never pay upfront fees as well. Before you receive funds, you will never have to cover application fees, processing fees, or “insurance fees” within a harsh deadline.

What Loans Should I Avoid and Why?

Unfortunately, the lending landscape is rife with scams.

Here are some red flags to watch out for:

Traditional Payday Loans With 400% APRs

One of the most dangerous types of loans out there is traditional payday loans, which often charge a 400% APR and require repayment in just 14 to 30 days, forcing borrowers to provide a lump sum. If you’re struggling to meet your monthly debt obligations, it’s almost impossible.

As a result, traditional payday loans offer rollovers, in which a second loan is taken out to pay the first, potentially extending your debt for years.

Auto Title Loans

Auto title loans require you to put your vehicle up as collateral. Charges range from $150 to $300, and APRs are typically due within 30 days. If you fail to make a payment, the lender reserves the right to repossess your vehicle without giving you notice, leaving you unable to get to work, or worse.

Auto title loans are also known for renewals or “rollovers,” which, at new fees, keep you from ever touching your principal. What starts as a small request for emergency cash may blow up into paying hundreds of thousands of dollars on an unnecessary loan.

Loans With “Guaranteed Approval” or No Credit Requirements

If you see 100% guaranteed approval within marketing language or promises of no credit check, watch out. Often, scammers use these tactics to steal your personal information, such as your Social Security number or other identity records. Under no circumstances does a legit lender guarantee approval beforehand without verifying your complete financial profile.

Tribal Payday Loans

One of the worst types of loans to take out is tribal payday loans, which are issued by lenders that claim tribal affiliation to skirt state regulations. Skirting state regulations means they can legally charge APRs higher than what usury law requires, along with shorter repayment timelines. With these loans, there’s a lack of regulatory oversight and little borrower protection in case the lender decides to go completely scam.

Complete scam means stopping automatic withdrawals or adding undisclosed fees without notifying the borrower beforehand. Avoid these types of loans altogether.

Lines of Credit

Another loan type to avoid is open-ended lines of credit, typically marketed online by scammers as “fast approval” or “no bank needed.” These lines of credit charge interest daily, with APRs ranging from 100% to 400%. They also charge maintenance fees and other unnecessary charges.

Plus, these scam credit lenders are known for setting extremely low minimum monthly payments that don’t touch the interest, leading borrowers to believe they’re paying off their balance. These low minimum payments are only designed to trap borrowers in interest-only cycles.