Signature Loans – What Are Signature Loans and Should You Get One?
Nowadays, your signature can show your approval, demonstrate your intent and even express your personality. In the world of commerce, however, your signature on a document seals the deal if and when the other person to the transaction also affixes his signature.
Did you know, however, that your signature can open up a world of loans and credits for you? Yes, just your simple signature on the loan agreement can provide the money necessary to finance your activities, whatever they may be.
What It Is
Signature loans come in many aliases like character loans, personal loans, unsecured loans and even payday loans. All of these types of signature loans point to a very important characteristic – you are able to secure the loan based on your promise to pay alone, with no security deposit necessary.
When to Use One
Signature loans can be secured with many end purposes in mind. You can use them to finance your studies, start and expand your business, spend on medical expenses, pay for and renovate your home, and even settle your outstanding bills.
However, you must be very careful about availing and then spending your signature loans. Since these are unsecured loans where your creditors take on higher risks of non-repayment, you will often have to shoulder higher interest rates, not to mention heftier penalties and fees. You have to carefully plan your decision to take out said loans lest you find yourself in more legal and financial troubles than you can handle.
Where to Secure
You can avail of signature loans from many sources. First, you can ask your local bank for a personal loan. Usually, your application will be approved when your records show that you have an active account with the bank and when your credit report reflects a good rating.
Second, you may approach credit facilities that offer short-term unsecured loans charged against your succeeding salary, which are also called payday cash advances. Even with a bad credit, you will still be able to avail of a loan when you meet minimum requirements like employment with present employer for 3 months and an active bank account.
Third, you can approach your employer for personal loans. Again, the loan amount may be credited to your succeeding payrolls for little to no interest. This is often the better alternative to payday loans especially when you consider that payday advances impose highly usurious rates in the long run.
Indeed, you will have an easier time at securing signature loans than you would with loans with collateral. After all, your character is often sufficient in the eyes of some creditor, with just a piece of paper proving that the transaction did happen.
Well, of course, you will avail of signature loans under many circumstances. It may be that you have a good credit rating and standing with the bank, thus, no collateral is necessary. It may be that you have no collateral to speak of, only your reputation. It may be that you have bad credit, thus, the signature loan.
Whatever the reason for availing of signature loans, just remember one very important matter – it is still a debt that must be repaid or else you must be ready to face the consequences.