When you need a little extra cash or you need to consolidate debt, a signature loan may help you. It is ideal for people whose credit is less than ideal, and it can help you meet your pressing financial obligations. You can easily obtain a signature loan from a lender and collateral is not a requirement.
What Is a Signature Loan?
As its name implies, it is a loan that you can get just by putting your signature on it. It is a type of personal loan. People that do not have the best of credit can often get one and you do not need to tie up any collateral such as a house or car, but there will be some requirements you will need to meet.
What Requirements Are There to Get a Signature Loan?
Although you do not need collateral to get this type of personal loan, there still are some requirements. Being that it is an unsecured loan; the lender will look at three things when you apply for one. They will consider your income, your credit history, and your signature.
You will need to verify that you are working, which you can often do with recent W-2s and bank statements. You may also need to reveal how much you pay for rent or a mortgage to help them be confident that you can make repayments.
How Much Money Can You Get?
The amount of money you can obtain on a loan of this type depends on the three factors above. It will depend on how much money you make, how much you want, and your credit score. Signature loans generally can run between $500 and $50,000. They are often smaller than other types simply because they do not need collateral.
The primary advantage of this type of loan is that collateral is not a requirement. It is not necessary to place your home or car at risk when taking out the loan because they are not used as collateral.
A second advantage is that there also are no restrictions on how you can use the money. You can use it to pay bills, consolidate debt, take a vacation, repair your home, cover emergency expenses, or whatever you want.
What Are The Expected Terms?
If you are approved for the loan, the terms will vary depending on your situation. There may be an origination fee attached to it, which may range from 1 to 8% of the loan. Interest rates will depend on your credit score, but they typically range from 6 to 36%.
How Can You Ensure You Get a Good Deal?
There are two things you need to do to ensure that you get a good deal on your signature loan. The first thing is that you need a good credit score. Taking some time to raise it before applying for a loan will help ensure that you get a better deal.
The second thing you need to do is to shop around for a good deal. Interest rates and repayment terms will vary with different lenders so you may not want to accept the first loan offer you are given. When you apply for a signature loan, it will cause a hard loan report to show up on your credit report. If you do not make very many applications and apply for them within a one to two week period, it will not hurt your credit score.