ContractsCounsel Logo
Home Types of Contracts Unsecured Loan

Jump to Section

ContractsCounsel has assisted 352 clients with unsecured loans and maintains a network of 156 financial lawyers available daily. These lawyers collectively have 30 reviews to help you choose the best lawyer for your needs.

An unsecured loan is provided without any type of security or collateral, supported by the creditworthiness and economic security of the borrower. They may be used for things like residence upgrades, international holidays, and medical bills, amongst other matters. Generally, interest costs on unsecured loans are higher than those on secured loans. However, lenders consider various factors, including creditworthiness and risk, when determining interest rates.

Essential Components of an Unsecured Loan

An unsecured loan often has the following components:

  • Loan Amount: The loan amount is the full amount the borrower asks for from the lender. Depending on the borrower's credit score records, it can be small or large.
  • Interest Rate: The interest rate is the price at which the lender lends money to the borrower on top of the predominant amount. In secured debts, the interest fee is commonly low.
  • Loan Term: The loan period is the agreed time frame wherein the borrower repays the loan and the interest to the lender.
  • Repayment Plan : The repayment plan specifies how frequently and what sort of each loan price should be. It includes due dates, installment payments, and the total number of bills to repay the mortgage fully. Common alternatives for compensation consist of biweekly, weekly, and monthly installments.
  • Documentation: To apply for an unsecured loan, applicants frequently want to provide precise assisting documents, which include evidence of identity, income proof, financial institution statements, and different relevant monetary information.

Factors Defining Eligibility for an Unsecured Loan

The following are a few common factors that creditors consider whilst thinking about a borrower's eligibility for an unsecured loan:

  • Verifying Credit Rating: Check the credit score utilizing a free internet service or through the credit card company before applying for any loan. After becoming familiar with the score, utilize the data to prequalify for secured debt or take action to raise the score and increase the chances of acceptance.
  • Considering Income and Employment Stability: Lenders look at their income and employment stability to determine a borrower's capacity to repay a loan. They might ask for recent pay stubs, bank records, or tax returns as proof of income. One must have a reliable and substantial income to prove financial stability and repayment capacity.
  • Focusing on Debt-to-Income Ratio : A degree of the borrower's month-to-month debt responsibilities to their income is the debt-to-profits (DTI) ratio. This ratio is utilized by creditors to decide a borrower's capacity for added debt. For loan eligibility, a decreased DTI ratio—typically beneath 40%—is high quality.
  • Searching for Age and Residency Criteria: These may be set by lenders for potential borrowers. Often, applicants for unsecured loans must be at least 18 years old. Additionally, borrowers typically have to be citizens or citizens of the United States of America from which they seek a mortgage.
  • Finding the Credit History : In addition to credit score rankings, lenders could consider the borrower's credit history. They look beyond loan reimbursement patterns, the lifestyles of delinquencies or defaults, bankruptcies, or enormous bad marks. A good credit history and an addiction to making timely payments can increase eligibility.
  • Eligibility and Loan Usage: The eligibility may be impacted by the loan amount and purpose. Some lenders could have limits for the minimum or maximum loan amount and limitations on how the loan proceeds may be used. Unsecured loans are frequently used for debt consolidation, home renovations, medical costs, or other personal requirements.
Meet some lawyers on our platform

Sara S.

147 projects on CC
CC verified
View Profile

Daehoon P.

203 projects on CC
CC verified
View Profile

Sarah S.

35 projects on CC
CC verified
View Profile

Tabetha H.

36 projects on CC
CC verified
View Profile

Benefits of an Unsecured Loan

Borrowers might benefit from unsecured loans in several ways. The following are some benefits of acquiring an unsecured loan:

  • Does Not Require Collateral: Unsecured loans do not require collateral. Generally, an individual does need to put up any assets as security for the loan, such as the house or vehicle. This may be advantageous if a person lacks valuable assets to provide as collateral or if the person doesn’t want to take the chance of losing them.
  • Flexible Use of Funds: Unsecured loans offer borrowers the flexibility to utilize the funds according to their discretion. The funds can be allocated to various purposes such as debt repayment, medical expenses, vacation financing, home improvements, or unexpected expenses.
  • Fixed Repayment Terms: Unsecured loans often come with fixed repayment terms. However, it depends on the specific terms set by the lender, so read the terms and conditions closely. As a result, budgeting and financial plans are more manageable because there's no need to worry about fluctuating interest costs.

Types of Institutions Offering Unsecured Loans

Three distinct types of organizations offer unsecured loans to borrowers:

  • Online Lenders: These non-bank organizations are frequently rooted in technology and provide a constrained selection of lending products, including unsecured loans. They can lend funds within 24 to 48 hours and often provide lower interest rates than traditional banks or credit unions.
  • Banks: Unsecured loans, like personal loans, are provided by numerous regional and national banks. If you already work with a particular bank, consider your choices with them and consider applying for an unsecured loan there.
  • Credit Unions: These are close to home and frequently include both online and offline application options. As membership in credit unions is required, be sure you are qualified.

Types of Unsecured Loans

There are three types of unsecured loans:

  • Personal Credit Lines: A line of credit enables you to access money as needed if you have needs that will be spread out over a long period, such as house renovations.
  • Unsecured Credit Card: A particular amount of spending power can be accessed by borrowers using credit cards, which are a sort of revolving loan that must be repaid in full each month. Although secured credit cards are offered, the majority of consumer cards don't.
  • Student Loan: Typically, government-backed student loans are unsecured. Government-backed lenders have the authority to accelerate loans so that they are due immediately and to take a borrower's federal tax refund to pay down the total owed on those loans. Private lenders may be secured or unsecured depending on the lender and the borrower’s creditworthiness.

Key Terms for Unsecured Loans

  • Collateral: It is a valuable item given to the lender to support the borrowed loan amount. It can be a car, a house, etc.
  • Borrower: A borrower is someone who accepts money from a lender with the promise to repay it within a predetermined period.
  • Mortgage: When the borrower and lender enter into a mortgage, the lender is granted the power to seize the formers’ belongings if they cannot pay back the loan amount plus interest.
  • Borrower: A borrower is a person or company who accepts money from a lender and promises to repay it within a predetermined time frame.
  • Secured Loan : It is a type of borrowing supported by property or other collateral that the lender may seize if the borrower defaults on the loan.

Final Thoughts on Unsecured Loans

Unsecured loans are loans that lack collateral or security. In the unfortunate occasion of a default, the lender cannot now get better loan stability through the usage of any form of collateral. This approach means that the lender cannot seize the borrower's assets or utilize any insurance guidelines owned by the borrower to recoup the extremely good mortgage stability. Consequently, lenders face large risks whilst providing unsecured loans.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Need help with an Unsecured Loan?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,582 reviews

Meet some of our Unsecured Loan Lawyers

Morgan S. on ContractsCounsel
View Morgan
5.0 (7)
Member Since:
July 31, 2023

Morgan S.

Attorney
Free Consultation
Austin, Texas
3 Yrs Experience
Licensed in TX, WV
University of Pittsburgh Law School

Corporate Attorney that represents startups, businesses, investors, VC/PE doing business throughout the country. Representing in a range of matters from formation to regulatory compliance to financings to exit. Have a practice that represents both domestic and foreign startups, businesses, and entrepreneurs. Along with VC, Private Equity, and investors.

Joshua B. on ContractsCounsel
View Joshua
5.0 (6)
Member Since:
September 19, 2023

Joshua B.

Of Counsel
Free Consultation
Austin, Texas
22 Yrs Experience
Licensed in TX
University of Texas

Josh Bernstein has been serving real estate and corporate transactional clients since 2002. His experience is varied, and he enjoys working on and puzzling out novel and complex corporate and real estate matters. Josh’s experience includes, among other things, the following: representation of public companies in connection with SEC reporting and compliance work (proxies, 10-K’s; 10-Q’s; 8-K’s, etc.); representation of public and private company securities issuances (including private placements, and other similar offerings); assistance in structuring and drafting joint ventures, both for investors and operating partners, and including both real estate and corporate ventures; handling public and private company mergers and acquisitions; and asset sales and dispositions; assisting clients, big and small, with real estate acquisitions, sales and financings; managing large-scale and multi-state real estate portfolio acquisitions, dispositions and financings; complex condominium creation, structuring and governance work, including: commercial condominiums, use of condominiums as a land planning tool, wholesale condominium property acquisitions and dispositions, and rehabilitating failed or faulty condominium legal structures to make ready for sale; development of restrictive covenants and owners’ association documents for master-planned communities; compliance with federal statutes governing real estate sale and development (including, without limitation, the Interstate Land Sales Full Disclosure Act, the Housing for Older Persons Act, and the Americans with Disabilities Act); representation of real estate lenders, for both improved and unimproved property, and including numerous construction financings secured by real estate; assistance with commercial leasing; from both the landlord and tenant side, and including condominium leasing; training residential home and condominium sales staff for compliance with applicable local and federal law; and workouts of all kinds. When he’s not busy lawyering, Josh may be found watching 80’s commercials, flying a single-engine plane, playing poker, or trying to be a good dad.

Garrett M. on ContractsCounsel
View Garrett
5.0 (7)
Member Since:
August 30, 2021

Garrett M.

Attorney
Free Consultation
Dexter, MO
8 Yrs Experience
Licensed in TX
University of Texas

I am a solo-practitioner with a practice mostly consisting of serving as a fractional general counsel to start ups and growth stage companies. With a practical business background, I aim to bring real-world, economically driven solutions to my client's legal problems and pride myself on efficient yet effective work.

Mark P. on ContractsCounsel
View Mark
4.6 (9)
Member Since:
July 21, 2023

Mark P.

Owner
Free Consultation
Kansas City, MO
9 Yrs Experience
Licensed in KS, MO, NE, TX
University of Missouri - Kansas City

www.parachinilaw.com I represent a diverse mix in a vast array of specialties, including litigation, contracts, compliance, business and financial strategies, and emerging industries. Credit for this foundation of strength goes to those who taught me. Skilled professors and professionals fostered my powerful educational and professional background. Prior to law school, I earned dual Bachelor’s degrees in Business Administration & Accounting from Peru State College. I received a Master of Business Administration degree from Chadron State College. My ambitions did not stop there. While working full time as a Senior Accountant for the University of Missouri, Columbia, I achieved the lifelong goal of becoming a licensed Certified Public Accountant (CPA). Mizzo provided excellent opportunities and amazing experiences. Managing over $50M in government and private research funding was a gift. As a high ranking professional in the Department of Research, I was given priceless insight into the greatest scientific, journalistic, medical, and legal minds in the world. My passion for successful growth did not, and has not stopped. I graduated summa cum laude (top 3%) with a Doctorate in Law, emphasizing in urban, land use and environmental/toxic tort law from the University of Missouri, Kansas City. This success lead to invaluable experiences of serving as Hon. Brian C. Wimes' judicial clerk for the U.S. District Court for the W. D. of Missouri, as a staff editor/writer for UMKC Law Review, and as a litigation and transactional attorney with Lathrop GPM (fka Lathrop & Gage). My professional and personal network is expansive, with established relationships throughout the U.S. and overseas. Although I engage in legal practice all over the country, I maintain law licenses in Missouri, Kansas, and Nebraska. Federally, I hold licenses in the W.D. and E.D. of Missouri and the District of Nebraska. To offer extra value, efficiency, and options, I maintain a CPA license and am obtaining a real-estate brokerage license.

Courtney A. on ContractsCounsel
View Courtney
Member Since:
July 19, 2023

Courtney A.

Branding and Business Law Attorney
Free Consultation
Phoenix, Arizona
8 Yrs Experience
Licensed in AZ
California Western School of Law

Hello! I am a transactional attorney enthusiastic about helping entrepreneurs launch and protect their businesses. Let me know how I can support you with drafting and negotiating contracts, setting up your LLC, copyrighting creative content, or trademarking your brand. I am experienced with drafting and negotiating business contracts, including service/vendor agreements, NDAs, marketing agreements, licensing agreements, terms & conditions, terms of use, and many more! I have helped companies develop strong template agreements and strategies for contract management. My goal is to deliver a simple, stress-free client experience!

Rudy C. on ContractsCounsel
View Rudy
Member Since:
July 19, 2023

Rudy C.

Esq.
Free Consultation
New York
1 Yr Experience
Licensed in NY
St-John's Law School

As a multilingual attorney, Rudy Cohen-Zardi holds multiple degrees from several institutions worldwide. He has gained experience in leading firms, including Eversheds Sutherland, LLP and Bank of China (NY). He is licensed to practice in New York. His practice focuses on bankruptcy, corporate, and contracts law.

Rhea J. on ContractsCounsel
View Rhea
Member Since:
July 21, 2023

Rhea J.

Attorney at Law
Free Consultation
Evansville, IN
10 Yrs Experience
Licensed in IN
University of Illinois at Urbana-Champaign

I am a graduate from Wittenberg University and University of Illinois at Urbana-Champaign. I have been admitted to the Indiana bar since 2013. I have collaborated on several writing projects for the Indiana State Bar.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with an Unsecured Loan?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,582 reviews
Financial lawyers by top cities
See All Financial Lawyers
Unsecured Loan lawyers by city
See All Unsecured Loan Lawyers

ContractsCounsel User

Recent Project:
Personal Loan from LLC
Location: Delaware
Turnaround: Less than a week
Service: Drafting
Doc Type: Loan Agreement
Number of Bids: 7
Bid Range: $350 - $999
User Feedback:
Zach was very Efficient and responsive.

ContractsCounsel User

Recent Project:
Loan agreement ( I am the lender)
Location: Florida
Turnaround: Less than a week
Service: Drafting
Doc Type: Loan Agreement
Number of Bids: 4
Bid Range: $450 - $600

Need help with an Unsecured Loan?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,582 reviews

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city