Applying for a Signature Loan- What You Need to Know
A Signature Loan- Getting the Right Financing for Your Needs
Most loans usually require some sort of collateral. Some may require borrowers to put up their home, vehicle, stocks, bonds, and more in exchange for a loan. However, not everyone is comfortable putting up their assets for cash, even when they find themselves in a bind.
It is entirely possible to get a loan today even if you have no collateral to put up. You only need to sign for the loan and provide good faith in paying it back.
Understanding a Signature Loan
A signature loan is often called a personal loan. Many lenders call it a “good faith loan” because they are basically allowing their customers to take out money with no collateral to back them up. Whatever you want to call it, a signature loan is a type of unsecured loan that doesn’t have a ton of qualification requirements. You simply need to sign for the loan, which is your promise that you will repay it back when the time comes. Signature loans allow you to take out larger loans than a typical payday loan. You will also have more time to repay the loan, making it easier to keep ahead of your finances. Once the loan is given to you, use it in any way you see fit- from going on vacation, paying off pesky bills, or consolidating old debt.
What are the Benefits?
•Borrow more than normal- Payday loans and credit cards give borrowers the access they need for emergency situations. However, the maximum amount you can borrow may still not be enough for your financial needs. Not only that, you’ll end up paying higher interest fees than you would if you take out a signature loan.
•Longer payment plans- It is much easier to repay a signature loan than a payday loan. That is because signature loan companies allow you to spread out the payments into more installments, rather than have you repay the loan in one lump sum. This is a more budget-friendly option than a loan that forces you to repay it in one very large sum.
•No collateral necessary- Not everyone has collateral that they are willing to put up in exchange for cash. Some borrowers do not have collateral at all, even if they wanted to use it. A signature loan company will only want you to sign for the loan. You will be in no danger of losing your home or car if you fall behind on payments. This type of loan is also perfect for those who are just beginning to build up their credit score.
•Quick approval- Since there are very few application requirements, signature loans are extremely easy to qualify for. The lender may check out your credit score, but it will not be a huge factor for the application. It usually takes just a few hours to be approved for a signature loan, instead of days.
Signature Loan Risks
As with anything, signature loans do come with some risks. Read on to learn more.
Possibly higher interest rates- Since the borrower is not putting up any collateral in order to get the loan, lenders will have to protect themselves in some way. Most will charge higher interest rates that can help cover their losses from borrowers who default on their loans. However, most rates are still lower when compared to payday loans and credit cards.
Overdue payments may result in credit score issues- Just because these types of loans do not 100% rely on your credit score doesn’t mean that late payments won’t be a problem. Timely payments are still a must for borrowers who want to keep their credit score up. However, since payments are spread out over a yearly basis for many borrowers, paying the loan back is easier.
It is important to talk to the lender and ask questions about the loan if you are unsure of the terms. You never want to take on a loan that you aren’t comfortable with. A reliable lender will patiently explain how the loan works and will answer any questions you may have.
Applying for a Signature Loan Online
It is easier than ever to get a signature loan today. You don’t have to hand over collateral or undergo a credit check. After you find a lender you are satisfied with, you will only need to complete the paperwork they give you and satisfy a couple of conditions to qualify for the loan.
What are the Requirements?
•You must be 18-years-old and have a valid, government-issued photo ID
•You must be a USA resident
•You must be regularly employed and earn a minimum amount
•You must show that you have an active bank account
•You must have a working phone number
After you submit these few requirements and satisfy all of the conditions, the company will have you fill out an online form or come into the loan company in person. Most lenders process their applications immediately and send out decisions within minutes. Depending on the actual lender, you will get your funds in just a few hours or by the next day. Funds are deposited right into your bank account, so make sure all of the numbers are correct.
Using Your Signature Loan
You’ll have the freedom to use your signature loan for anything that you want after you receive it. You can use it for the following issues:
Understanding How Signature Loans Work
Your signature is what makes the loan happen. You won’t need collateral or a perfect credit score in order to secure a loan. Because of this, signature loans do have higher interest rates. Every lender is different when it comes to how much can be borrowed and their interest rates. Some allow you to borrow anywhere from $500 to $20,000 dollars at a time, payable anywhere from six months to a few years.
The lender will work out a payment schedule with you when you apply. You’ll then pay your loan off on a monthly basis until you pay it in full. You will usually only be permitted to take out one loan at a time.
Repaying the loan can be done in a few ways. Some borrowers visit the store to hand over a payment. Others prefer to mail in money orders or pay over the phone. Many also allow the lender to take out monthly payments from their checking account every pay date. This way makes it easier for everyone.
Why Should You Apply for a Signature Loan?
There are many reasons why taking out a signature loan is a good idea. Many people are faced with school tuition, medical bills, home repairs, or funeral costs. They don’t know where to turn, and payday loans often don’t provide enough cash for the situation to be useful. Since signature loan companies allow you to borrow more, they are much more useful for larger issues.
What to Consider First
You never just want to jump into a loan agreement before knowing all of the facts. First, determine why you need the loan and how much you want to borrow. Take a good look at your finances and make sure that you can fit the monthly payments into your budget without issue.
You will also need to consider how long the loan term will be. Some borrowers would rather have a longer time to repay the loan so that it can be spread out more. Others would rather pay it off as quickly as possible. Choose a payment plan that works for your specific situation.
Remember, the loan will come with an interest rate. Some lenders will also charge fees for processing the loan. Always ask questions to find out what exactly you will be paying towards every month. You don’t want to be blindsided with extra fees that you weren’t aware of from the start.
Bad Credit and Bankruptcy Isn’t a Problem
Signature loans are not just for borrowers who have great credit. In fact, they are designed for people who may not have the best score. They are also available for men and women who may have dealt with a bankruptcy in the past.
Most signature loan lenders will not rely on just your credit score when deciding to approve you for a loan, but they still may consider it. As long as you can satisfy the personal conditions set forth by the lender and submit the paperwork they require, you should be eligible for a loan for sure.
What is the Difference Between Signature and Payday Loans?
Not everyone understands the difference when it comes to these two types of loans. We can help you decide which is better! Signature loans will always be the better option when it comes to borrowing from a lender, and there are many reasons why we can positively say that. Read on to learn more:
They are Quick and Easy
Payday loans may be popular because they are so easy to qualify for, but signature loans are exactly the same. Since your credit score is not a huge factor when you get the loan, there will be no lengthy credit or background check to get it. It is called a signature loan because that is basically all that you need to qualify- your signature.
Interest Rates are Lower
Most payday loans come with interest rates that are no less than 400%. This is why it can be so hard to pay them off in time, especially when your payment is due just a week or two after you take out the loan. Signature loans will have lower interest rates, making them that much easier to pay off when compared to a payday loan.
Loan Amounts are Bigger
Since payday loans are based on how much you make each pay period, you will not be able to borrow more than what you make. Most lenders have caps on the amount that borrowers can take out, and some lenders have to abide by state laws concerning loan amounts. A signature loan may approve you for a loan up to $30,000 depending on your financial standing and the lender. This is about 15 times the amount you could receive from a payday lender. Plus, the interest rate is much lower for borrowers.
Pay Them Back Easily
Signature loans are actually like installment loans- the cost of the loan and interest will be divided up into equal monthly payments. You’ll be responsible for paying the loan back every month. Since signature loan lenders often give you years to repay the loan, you can easily pay it back without going into debt or ignoring other financial responsibilities.
LoanTruth can Help!
You may need a signature loan for a number of reasons. Whatever they are, we can help. LoanTruth has been in business for many years, and we offer amazing customer service and a stellar track record. We are a signature loan lender who can provide you with a loan to help out any situation you are in.
Our loan specialists will work with you to figure out what your loan needs are. We are flexible and responsible and won’t let you take on more than you can handle. We want to make sure that the loan you receive is one that you can comfortably pay off in a certain amount of time. We can help you get out of whatever financial trouble you have found yourself in.
We also offer quick processing times, high approval rates, and immediate decisions. Our specialists understand that you likely need cash quickly and can’t afford to wait. We will walk you through the process and make sure you understand the terms and conditions of your loan before you sign anything. Let us help you get the signature loan that you need today!