- Because (almost) all of us need more money...
If you’re looking for fast cash, a signature loan may be a viable option. There are various types of loans available, so any borrower can find one that meets their needs. In this guide, we’ll explain what signature loans are, how they work, what their benefits are, and how to get the lowest rates possible.
Signature Loans: What Are They and What Are Their Benefits?
Signature loans are unsecured personal loans, which means there’s no need for collateral. Borrowers won’t have to put up any of their assets, such as homes and vehicles, to secure such loans. In most cases, signature loans come in smaller amounts than auto loans and mortgages, and their repayment terms are also shorter. These loans also offer lower interest rates than credit card cash advances. Signature loans offer the following benefits:
- Borrowers can use the funds for any purpose they choose, with no restrictions.
- Credit building. With prompt repayment, signature loans may help borrowers raise their credit scores.
- Easier qualification. Because these loans aren’t secured by collateral, borrowers can get them even with bad credit.
If you’re thinking of taking out a signature loan, it’s crucial to compare rates from multiple lenders. King of Kash is here to help you find the right loan for your budget and needs.
How the Application Process Works for Signature Loans
As mentioned before, signature loans are not secured by collateral. This makes them a great choice for those with bad credit, as they likely can’t qualify for other lending products. Applying for a signature loan is usually much easier than applying for other kinds of loans; in most instances, borrowers only have to provide basic information such as their Social Security number, address, and name.
To get a favorable interest rate on a signature loan, though, good credit is a necessity. Lenders use credit scores to determine a borrower’s candidacy and the interest rates for which they qualify. Those with poor credit may be able to get signature loans, but they’ll come at a higher interest rate. Despite these limitations, signature loans are still a good short-term cash sourcing option for borrowers with not-so-good credit.
What’s the Signature Loan Borrowing Limit and Term?
Signature loan amounts typically range from $100 to several thousand dollars. Repayment terms depend on the amount borrowed, but most loans have terms of two weeks to six months. If you’re looking for an extended repayment period, consider getting a personal loan instead. These loans have multi-year terms, so payments can be spread over a longer timeframe.
What Will Happen If the Loan Isn’t Repaid On Time?
If you can’t repay a signature loan within the term, late fees may apply. Additionally, the lender may report those missed payments to the major credit bureaus, which will negatively affect your score. When problems arise and missed payments become inevitable, contact the lender right away to learn about your options.
Learn About Signature Loans and Make the Right Decision
Signature loans are a great way to finance large purchases, cover unforeseen expenses, and consolidate debt. As with other loans, however, it’s crucial to learn about these loans’ terms and conditions before signing on the dotted line. With the tips and advice in this guide, borrowers will find it easier to make informed decisions.