Personal loans are one way of financing that stuff you want or need, which just doesn't really fit your budget. Whether you need to bridge a financial gap or just want to buy something without dipping into your savings, getting a low-cost loan can help.

They are certainly preferable to payday loans for those times in life when you need to borrow money for planned or unexpected expenses. But getting a personal loan without offering securities can be difficult.

An unsecured loan is one that is not backed by collateral, such as your home or car. You might qualify for an unsecured loan in the range of $1,000 to $50,000, depending on your credit rating, wealth and income.

Because they are not collateralized, unsecured loans normally cost more than secured ones and are often harder to obtain. Nonetheless, there are a few things you can do to increase your access to unsecured loans at the best available rates.

Here are's 6 tips on getting a cheap unsecured personal loan:

  1. Boost Your Credit Score

    If you have advance knowledge that you will be needing an unsecured loan, use the time to improve your credit score. You can do this by paying off old debts and clearing credit card balances. Refrain from opening new credit cards in the period before applying for the loan. In addition, scour your three credit history reports for errors and have the credit bureaus fix the mistakes right away. An incorrect entry on your credit report can cost you dozens or hundreds of points on your credit score, which is the primary determinant of your access to unsecured loans.

  2. Borrow From A Credit Union

    Credit unions are non-profit institutions in which you must first obtain membership before applying for a loan. Nowadays, it's fairly easy to find one or more credit unions that you are eligible to join -- often, the requirements are geographic, job-related, or your affiliation with some group. As non-profits, credit unions typically charge less for unsecured personal loans than do profit-making institutions such as banks.

  3. Use A Co-Signer

    If your credit rating and history is less than stellar, you can benefit from having another person who knows and trusts you co-sign your loan. To be effective, the co-signer should have a good credit rating and sufficient wealth or income to repay the loan if you can't.

  4. Convey Your Repayment Plan

    A loan officer is more likely to look favorably upon your loan application if you provide a written budget and supplementary documentation displaying your ability and commitment to repay the loan. If the loan requires monthly repayments, show that you can afford to make the payments without financial hardship. It will also help if you demonstrate a good work record without long periods of unemployment.

  5. Avoid Loans With Unfavorable Terms

    If possible, you want to avoid unsecured loans that have high contingent fees. For example, some lenders may want to impose a prepayment penalty if you want to pay off the loan early. Others may have large application fees or may charge continuous interest (the most expensive kind) on your unpaid balance.

    Some banks want you to have an account from which they can electronically draft the monthly payments. That's not necessarily a bad thing, as it might save you some money. But be sure that the account has overdraft protection so that you aren't charged additional fees if your balance is below the payment amount. Better yet, never allow banks to draw payments if you aren't sure that your account balance is more than enough to cover them.

    A reputable lender discloses, in writing, all the potential costs associated with an unsecured loan. Don't sign on the dotted line without this information.

  6. Consider A Peer-to-Peer (P2P) Lender

    P2P lenders, such as Prosper and Lending Club, facilitate unsecured loans from individuals who have money to lend. P2P sites that operate as reverse auctions can help get you the best possible rate. The winner of a reverse auction is the lender who offers the lowest rate, which makes it a win-win scenario for you and the lender.

    You need a good or excellent credit rating to get a low interest rate from a P2P lender. Often, these lenders disapprove 90 percent or more of the loan applications they receive.

If you don't have a good credit history, it will be hard to qualify for a cheap loan with good terms. However, we recommend that you never opt for a payday loan unless you understand that a payday loan is just that.

These are short-term loans with high interest rates that become crazy-high if you don't pay back your debt on time. If you aren't 100% sure that you will be able to pay off your loan in full on your payday, you're better off staying away from these altogether.

If you want to make a big-ticket purchase, consider applying for a low-interest credit card instead. These are credit cards that give you a 0% interest rate on your purchases for a certain amount of time, starting from the point at which your new account is opened.

If you have excellent credit, you can get introductory 0% APR periods of as long as 18 months. If you have fair credit, you can still get cards with introductory low APR periods, although the periods for these cards are rarely longer than 12 months.

Do you need a credit card? It pays to shop around using a credit card website like