{"id":3597,"date":"2022-06-15T04:58:00","date_gmt":"2022-06-15T11:58:00","guid":{"rendered":"https:\/\/financer.com\/?page_id=3597"},"modified":"2024-01-19T08:45:09","modified_gmt":"2024-01-19T16:45:09","slug":"signature-loans","status":"publish","type":"wiki","link":"https:\/\/financer.com\/loans\/articles\/signature-loans\/","title":{"rendered":"Signature Loans"},"content":{"rendered":"\n

When you\u2019re in need of a loan, you have many options available to you depending on the use of the funds. These include mortgages<\/a>, auto loans<\/a>, and cash advances. However, when none of these fits your needs, signature loans are another option to consider. <\/p>\n\n\n\n

Signature loans are exactly what they sound like: just by signing your name on the dotted line (or clicking \u201csign here\u201d on an electronic signature form), you can get a loan without putting up any collateral<\/a> or having to apply for a specific purpose.<\/p>\n\n\n\n

With household debt exceeding $16.1 trillion in the second quarter of 2022, borrowers are increasingly looking at loan options, which is why signature loans have become so popular. <\/p>\n\n\n\n

But what does it take to get approved for one of these types of loans? How do they work? And how can you find out if you\u2019re eligible? <\/p>\n\n\n\n

In this review of signature loans, we\u2019ll look at all that and more\u2014and answer some frequently asked questions about these loans.<\/p>\n\n\n\n

What is a Signature Loan?<\/h2>\n\n\n\n

A signature loan is an unsecured loan<\/a>, meaning that it doesn’t require you to use any collateral as a guarantee of repayment. <\/p>\n\n\n\n

Signature loans are available to anyone with a good credit history <\/a>and steady income.<\/p>\n\n\n\n

Signature loans have some advantages over other financial products: First, they can help you get money when you need it fast. <\/p>\n\n\n\n

In addition, because there’s no collateral involved<\/strong> \u2014unlike car title loans or payday advances<\/a>\u2014you are essentially giving the lender your signature as assurance that you will repay the loan.<\/p>\n\n\n

<\/div>Signature loans can help those who want to consolidate debt<\/a> to a lower monthly payment over time by taking out one larger sum instead of several smaller ones spread out over months or years (and paying off each of those smaller debts).<\/div>\n\n\n

Signature loans are widely available to those with great credit histories<\/a>. Borrowers with lower credit scores can expect to see very high APRs if they even qualify for a signature loan.<\/p>\n\n\n\n

Why are signature loans so hard to get?<\/strong> Because they are completely unsecured. <\/p>\n\n\n\n

The only thing keeping the borrower from paying it is the potential damage to their credit report. If the borrower defaults, the bank has no real recourse or collateral to seize. The lender may attempt to sue, but this is generally unsuccessful and expensive. <\/p>\n\n\n\n

How Do Signature Loans Work?<\/h2>\n\n\n\n

Signature loans are also known as cash advance loans<\/a>. They\u2019re unsecured, meaning you don\u2019t need to put up collateral with the lender to borrow money<\/a>. <\/p>\n\n\n\n

This makes them easier to get than other types of loans, like mortgages and car loans.<\/p>\n\n\n\n

Signature loans are not always credit-based loans; they may not require credit checks<\/strong> or approval from a bank or other financial institution before you can apply for one. <\/p>\n\n\n\n

They can be approved within 24 hours and have very little paperwork involved with the process\u2014many people receive their approval within hours after submitting an application online or over the phone.<\/p>\n\n\n\n

Typically, you\u2019ll repay signature loans in fixed monthly installments over a set period of time which can be several months to several years.<\/p>\n\n\n\n

Who are Signature Loans for?<\/h3>\n\n\n\n

Because signature loans aren\u2019t secured, lenders will rely more heavily on your creditworthiness, weighing your credit score and debt-to-income ratio rather than your collateral. <\/p>\n\n\n\n

This makes signature loans best for those with good credit scores and low debt-to-income ratios. Having a good credit score can also give you the best chance at qualifying for a lender\u2019s lowest APR rates.<\/p>\n\n\n\n

\ud83d\udca1 Struggling to qualify for a signature loan? Here are eight ways to improve your credit score<\/a>.<\/strong><\/p>\n\n\n\n

What is the Best Way to Use a Signature Loan?<\/h3>\n\n\n\n

Signature loans can be used like any other personal loan, but are often used in emergency situations. If you need money quickly and don\u2019t have time to wait for a traditional loan to go through, then a signature loan can be an excellent option.<\/p>\n\n\n\n

While they are not as easy to obtain as other types of loans, they offer flexibility that can help you get out of trouble when you’re caught off-guard financially.<\/p>\n\n\n\n

Signature loans are also an option for those who already have an emergency fund<\/a> and want another source of cash in case they run into an unexpected expense or need more money than their emergency fund will cover.<\/p>\n\n\n\n

Keep in mind that this is only an option if you have a good credit score<\/a> or a guarantor who can back you up!<\/p>\n\n\n\n\t\t

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The Pros and Cons of Signature Loans<\/h2>\n\n\n\n

While signature loans are similar to other loans, there are a few key benefits to them. Here are a few benefits of a signature loan:<\/p>\n\n\n

Pros<\/h3>