What is a Signature Loan?

Learn what a signature loan is and how it can get you the cash you need.

What is a Signature Loan? 

Signature loans are a type of unsecured loan that are backed by the customer's signature. Sometimes these loans can also be known as a "good faith loan" or a "character loan" because they are backed more by the character of the customer than traditional loan collateral

Because this is a more high-risk loan type, it might be difficult to qualify for a signature loan or avoid higher interest rates. Not all loan providers offer them, but when they do, they might have customer requirements like several forms of contact information, government identification, proof of income, proof of address, and even character references. 

How Does a Signature Loan Work?

To get a signature loan, you first need to find a loan provider that offers them. 

Once you find a loan provider, you'll have to meet whatever requirements and qualifications they might have for this loan type. 

These requirements might include proving your identity and your trustworthiness with contact information, credit history, and even personal references. 

If you meet all of their requirements and your application is accepted, then take out the loan usually by signing some papers or a post-dated check to act as your collateral or loan payment.

Reasons to Get a Signature Loan 

Like many other kinds of high-risk loans, signature loans can be expensive. To compensate for the higher risk they take, loan providers might require more qualifications when applying for this loan type and a higher interest rate. 

Despite the cons, there are still pros to consider. 

Signature loans can have a quick application and funding process so long as you get approved. This can help you get the funds you need faster. 

This loan type can offer quick access to the funds you need in an emergency like your car breaking down or bills being overdue. It could also make up the difference you need to pay for something important. 

Signature Loans vs Revolving Credit 

Revolving credit is like a continuous line of credit. Rather than taking out a set loan amount and paying it off with a fixed payment plan, revolving credit gives you access to a continuous credit amount you can use. 

Credit cards are a type of revolving credit. They offer access to a set amount of credit (also known as a credit limit) and you don't have to reapply to regain access to that same credit amount. You always have it so long as you have the credit card account. 

Revolving credit differs from a signature loan because signature loans are not a line of credit. Instead, they are a one time loan you apply for, receive, and payoff. If you want more credit from a signature loan, you'll need to reapply for another individual loan. 

Signature Loans vs Installment Loans

Signature loans and installment loans are more similar in that they are both a single use credit option. Both come with requirements, applications, and set payment plans. They also can both be used for personal reasons, unlike other loans (like a mortgage) that are only taken out for one purpose (to buy a home). 

But signature loans are not the same as installment loans. Usually installment loans offer larger loan amounts than signature loans, which usually offer smaller loan amounts. Signature loans usually come with a shorter loan term and a shorter payment plan. 

Because the nature of each loan type is different, they will also come with different terms and conditions, rates and fees, qualification requirements, and application process. 

The details of your loan agreement will depend on the lender and the way they have their loan products set up. 

How to Get a Signature Loan at Check City

Check City lives to make the lives of our customers easier. That's why we put extra time and care into making our loan process simple and quick.

To get a signature loan, you'll need to fill out an application, provide the Signature Loan requirements, and wait to get approved.

To Get a Signature Loan You'll Need: 

Because this financial product isn't backed by traditional loan collateral, you'll need to meet different qualifications in the application process for this loan. Basically, qualifying for this loan boils down to proving you can repay the loan and proving you are likely to be a responsible borrower and repay the loan. 

What You'll Need:

  • Basic Contact Information
  • Government ID 
  • Proof of Income (applicants need to be employed for a minimum of 6 months)
  • Proof of Address
  • 2 References 

Can I Get a Signature Loan with Poor Credit? 

If you have bad credit and need a loan, you're probably looking for loans that don't require credit checks as part of the collateral. 

Unfortunately, it's very common for most loans to have some kind of credit check involved in the application process, even many signature loans out there. 

Luckily, there are many things you can do to increase your credit score so you can more easily apply for whatever financial services you need. 

In Conclusion, 

Signature loans can be really helpful for borrowers who need a simple, small loan. At Check City we understand that sometimes you just need a helping hand to get back on your own two feet financially. 

We also understand that sometimes what you need isn't a giant bank loan, but a small loan from a short-term lender like us. Visit Check City online and in stores today to learn more about the Check City Signature Loan and other financial solutions available to you.