Based on the rational system of Legendre rational functions, we construct two set of new interpolation basis functions on the unbounded intervals. Their explicit expressions are derived, and fast and stable algorithms are provided for computing the new basis functions. As applications, new rational collocation methods based on these new basis functions are proposed for solving various second-order differential equations on the unbounded domains. Numerical experiments illustrate that our new methods are more effective and stable than the existing collocation methods.