An unsecured home improvement loan is a type of personal loan that does not require the borrower to pledge any collateral, such as their home equity, when taking out the loan. Because there is no collateral at stake, unsecured home improvement loans tend to have higher interest rates than secured loans, such as home equity lines of credit (HELOCs) or home equity loans. However, an unsecured loan may be a good option for borrowers who do not have enough equity in their home to qualify for a HELOC or who would prefer not to put their home up as collateral.