How to Get a Signature Loan

Signature loans are loans that are backed by an individual's signature signed on a promissory note rather than with collateral. Because there is no collateral needed, these are unsecured loans, which is why they are commonly referred to as "good faith loans." Furthermore, the amount loaned does not exceed $10,000 to $15,000 with a term of no more than 5 to 6 years, depending on the financial institution chosen.

Although obtaining a signature loan is as simple as walking into a credit providing institution, there is a certain amount of preparation needed and steps to be followed.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• A trusted financial institution Identification Social security card Utility bill Pay stub Bank account information.

Steps

1. Find a trusted financial institution if one is not already in place. Visit Web sites and make phone calls to find the credit-providing institution offering the most competitive terms and interest rate.

2. Call the chosen institution and set up an appointment with a loan officer. This is the best way to obtain their undivided attention because they will be prepared for your arrival.

3. At the appointment, provide supporting information such as identification and social security card to prove identity, utility bill to prove address, pay stub or Schedule C (if self-employed) to prove income, and bank account information if one exists.

4. State the loan amount being sought and discuss terms of the loan. Confirm interest rate, loan term and monthly payment.

5. Sign the requested paperwork, reading it carefully. The institution will also request that a form be signed that gives them permission to use the Social Security number to do a credit check.

6. If credit is satisfactory and all terms are agreed to, the institution will draw up the appropriate paperwork to be signed by both parties. Once the paperwork phase is complete, the loan money will be awarded.

Tips & Warnings

• If unable to acquire an unsecured signature loan, there are secured signature loans. The loan is secured by using the borrower's savings account as collateral. The borrower is unable to disturb the money in his savings account during the term of the loan and the money in the savings account continues to earn interest.
• There are "no credit check signature loans." However, be mindful of the fees and the terms of these loans. The fees are usually high with interest added, the maximum amount that can be borrowed is small, and the term is short. These loans are frequently referred to as "payday loans." A payday loan can be useful when borrowing no more than what is needed because the amount is most likely paid back on the borrower's next payday. These loans are not offered by banks, but offered by institutions specializing in these types of loans.

References

• Streetdirectory.com
• iseekloans.com

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