Unsecured personal loan rates represent the interest rate on unsecured loans. Interest rate can be defined as the rate which is charged by the lender for the use of money from the borrower. A borrower has to pay a set percentage of interest every month after availing the unsecured personal loan. This interest amount acts as a profit for the lenders and financial institutions, who offer loan facilities on some set terms and conditions.

Interest payment record along with the borrowing record is maintained by the credit bureau. In case of non-payment or default, the record becomes poor and it becomes difficult to get the loan on poor credit record. Unsecured personal loan rates vary on the basis of requirement and loan amount, but they are usually high as compared to secured personal loans. As there are many lenders available in the market, interest rates also diminish due to high competition among them. To increase the number of clients, terms and interest rates on unsecured loans are minimizing by the lenders.

Unsecured personal loan is a form of personal loan that can be applied to fulfill any personal need for instance; payment of monthly bills, medical expenses, repairing house, to spend vacations, wedding, educational purpose and many others. A person who is short on funds with a bad credit record can easily get the loan. Before applying for loan, a borrower should do a complete market research and analysis on different unsecured personal loan rates and requirements on unsecured loans. These loans are termed as unsecured loans, as there is no property used for the loan as collateral. Therefore, they are different from mortgages and home equity loans.

Some characteristics of unsecured personal loans are:

1)      Collateral: in unsecured loan no collateral is needed, and loan is not guaranteed by any security.

2)      Interest rates: unsecured personal loans rates are higher than the secured personal loans as no collateral is used. Sometimes, interest rates are above 10% of the total loan amount, which is quite high.

3)      Terms and conditions: at the time of agreement between the borrower and lender, term of payment is decided and borrower has to pay back the loan in the set term without any delay along with the interest.

4)      Bad credit: people with bad credit score can get the loan from lenders and there is no credit check.

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