Updated November 2026 ยท National Loans USA is not a lender. How we make money.
Say you need $14,500 and don’t want to put your car or home on the line. Unsecured loans let you borrow without collateral. The lender decides based on your credit, income and existing debt. Because the lender takes more risk, rates usually run higher than on secured loans. Most personal loans and credit cards are unsecured.
Right for you if:
- You don’t want to risk your car, home or savings.
- Your credit is fair or better, so the rate gap with a secured loan is small.
- You have steady income that covers the payment with room to spare.
- You want a fixed payment and a clear end date.
Not right for you if:
- Your score is low and the only offers carry APRs near 36%.
- You have savings or an asset you could safely borrow against for much less.
- Your income is irregular and a missed payment is likely.
- The loan would only cover ongoing spending that your income can’t support.
What do unsecured loans cost?
Unsecured loans usually cost more than secured ones because nothing backs the debt. The Federal Reserve’s G.19 release put the average bank rate on 24-month personal loans at 11.90% in August 2026. Credit cards cost more. The same release shows an average of 22.36% on card accounts charged interest.
Credit unions often price lower. NCUA’s rate survey put the average 36-month unsecured loan at 10.64% at credit unions and 12.00% at banks, as of December 2025. Online lenders often publish ranges of about 7% to 36%. Your credit, income and debts decide where you land.
The catch is the fee. Among lenders that charge one, an origination fee often runs 1% to 10% of the loan. It often comes out of the money you receive, and it raises the APR.
| Unsecured option | Typical rate | Source and date |
|---|---|---|
| Personal loan at a bank, 24 months | 11.90% average | Federal Reserve G.19, August 2026 |
| Unsecured loan at a credit union, 36 months | 10.64% average | NCUA, December 2025 |
| Credit card, accounts charged interest | 22.36% average | Federal Reserve G.19, August 2026 |
| Federal credit union loans, most types | 18% maximum | NCUA ceiling through September 10, 2027 |
| Online personal loans, full range | About 7% to 36% | Lender rate tables, 2026 |
Example: unsecured vs. secured on $14,500
Example. You borrow $14,500 for 48 months with no fee. Unsecured at 12.75% APR, your payment is about $387.20 a month. You repay about $18,585.69, so the total cost is about $4,085.69.
Now say you secure the same loan with a vehicle or savings and get 8.25% APR. Your payment drops to about $355.69, and you repay about $17,073.19. The total cost is about $2,573.19. The secured loan saves about $1,512.50, but you could lose the asset if you can’t pay. These rates are illustrative. Your offer depends on your credit, income and the lender.
⚑ Red flag: An honest unsecured lender will not ask for any of the following.
- A fee before you receive the loan. The FTC says no legitimate lender guarantees a loan in exchange for an upfront fee.
- A promise of approval no matter your credit history.
- Payment by wire, gift card or cryptocurrency, which is hard to recover.
- Unsolicited calls offering a loan and asking you to pay first. Our guide to advance-fee loan scams shows how these work.
If you want to compare unsecured offers, you can use our loan request form. National Loans USA is not a lender. Lenders in a third-party network review your request and may check your credit. They set their own rates and terms, and submitting doesn’t guarantee an offer.
Safer and cheaper alternatives
A cheaper loan may be available if you can accept some trade-offs. Each one comes with a trade-off.
- Join a credit union. Most federal credit unions can’t charge more than 18%, and their average unsecured rate is below the bank average.
- Borrow against savings. A loan secured by a savings account or certificate usually costs less. The lender can keep the savings if you don’t repay.
- Add a co-signer. The FTC warns that a co-signer may have to repay the full debt plus fees. Ask only someone who understands that risk.
- Borrow less. A smaller loan can mean a better rate and less total interest.
- Use home equity only with care. A home equity loan is secured by your house, so missed payments can lead to foreclosure.
Our guide to secured vs. unsecured loans compares the two side by side. If you are combining card balances, see our debt consolidation guide.
Common types of unsecured loans
Unsecured credit comes in several forms, and each one fits a different need. These are the ones most borrowers see.
- Personal installment loans. You get a lump sum and repay it in fixed monthly payments over a set term. Our personal loans guide covers them in detail.
- Credit cards. You borrow up to a limit and repay as you go. Rates are usually higher than on personal loans.
- Personal lines of credit. You draw money as needed and pay interest only on what you use. Rates are often variable.
- Credit union payday alternative loans. Federal credit unions offer these small loans of $200 to $1,000 for one to six months, at no more than 28% APR.
- Student loans. Most are unsecured, but they follow their own rules and repayment programs.
Payday loans are also unsecured in most cases, but they cost far more than the options above. The CFPB says a typical payday fee equals an APR of almost 400%. Our cash advance guide explains why they are a last resort.
How lenders decide on an unsecured loan
Lenders approve unsecured loans mainly on your credit history, income and current debt. Your credit score is usually the biggest factor. FICO says payment history makes up 35% of its score and amounts owed make up 30%. Lenders also look at how long you’ve worked and how steady your income is. Many compare your monthly debt payments with your income, a figure called your debt-to-income ratio.
Before you apply, check your credit reports for free at AnnualCreditReport.com. Prequalify where you can, since a soft inquiry does not affect your score. A full application usually adds a hard inquiry.
What happens if you can’t repay an unsecured loan?
The lender can’t take your property right away, but missing payments still has serious effects. You may owe late fees, and the missed payments can hurt your credit. The lender may send the debt to collections or sue you. According to the CFPB, most creditors can garnish your wages only after a court issues a judgment. If you are falling behind, call the lender early and ask about a hardship plan. Our guide to your rights with debt collectors explains what collectors may and may not do.
Frequently asked questions
Is a personal loan secured or unsecured?
Most personal loans are unsecured, so you don’t pledge collateral. Some lenders also offer secured personal loans backed by a car or savings. Those may cost less, but the lender can take the asset if you default.
What credit score do I need for an unsecured loan?
No single minimum score applies, because each lender sets its own rules. FICO labels 670 to 739 as good and 580 to 669 as fair. Scores in the good range or higher usually get better rates. Scores below 580 face high APRs or denial.
Can an unsecured lender take my car or house?
Not directly, because the loan isn’t tied to them. A lender would first need to sue and win a court judgment. What a creditor can collect after a judgment depends on your state’s law.
Why are unsecured loans more expensive?
Unsecured loans cost more because the lender has no asset to fall back on if you stop paying. The lender prices that risk into your rate. Borrowers with strong credit pose less risk, so they tend to see the lowest rates.
Does an unsecured loan help my credit?
An unsecured loan can help your credit if the lender reports to the bureaus and you pay on time. Payment history is the largest part of a FICO score. A missed payment, though, can hurt your score.
