An example of a signature loan is a standard personal loan. A personal loan is a lump sum of money that can be used for almost anything, like consolidating debt or making a big purchase, and personal loans that don’t require applicants to put anything up as collateral are considered signature loans.
The best personal loans are from LightStream. The company offers $5,000 - $100,000 in funding with APRs of 5.99% - 22.49% and repayment periods of 24 - 84 months. You’ll need a credit score of at least 660 to qualify, according to multiple third-party sources.
The best personal loan interest rates vary a lot over time and depend on several factors, including the applicant’s credit score, income, monthly housing payment and existing debt obligations. The loan term and amount have an impact, too, as does the overall economic climate.
The average APR for a 24-month personal loan was 10.07% as of December 2019, according to the most recent data available from the Federal Reserve Bank of St. Louis. By definition, the best personal loan rates have to be below average, so 10% is a good benchmark to beat. That average has gone up a bit in recent years, after bottoming at 9.45% in Nov. 2016. But personal loans rates are still 50% lower than they were in the 1980s.… read full answer
As you can see, the better your credit score is, the more you can expect to borrow with a personal loan, and the lower your finance charges should be. So the keys to saving money are to get your credit in the best shape possible and compare offers in order to identify the best terms you can qualify for.
Your free WalletHub account provides customized credit improvement advice, along with personalized recommendations for offers likely to save you money.
A signature loan is an unsecured personal loan that does not require any collateral other than your signature. Your signature represents your promise to repay the loan and makes the loan agreement a legally binding document.
The best signature loans have APRs as low as 2.49%.
Signature loans often have origination fees of 1% to 8%.
The payoff periods are 12 months to 144 months (12 years).
You'll need to meet the lender's credit score and income requirements to qualify for a signature loan, along with other requirements like being at least 18 years old, having a bank account and having enough income to make monthly payments.
A signature loan is a good idea if the loan is inexpensive compared to your other options and affordable based on your current budget. It’s also best if the expense you’re getting the signature loan for is truly necessary, as you don’t want to take on debt without good reason.
A signature loan is a loan that doesn’t require any collateral other than your signature. You can learn more about when getting a signature loan is a good idea below.
When a Signature Loan is a Good Idea
If the loan’s terms are better than your other options
You may get a lower APR on a signature loan than a credit card if you have good or excellent credit. However, some credit cards offer 0% APR introductory periods for as long as 21 months. So, if you need funds for a relatively small expense, a credit card may be a better option.
You may also be able to get a loan with flexible terms from a friend or family member. You risk damaging your relationship if you don’t repay the loan, though.
If you know you can repay the loan
Signature loans can take a few months to a few years to repay. You’ll need to make sure you can afford the monthly payments, along with your other monthly expenses.
Signature loans will also improve your credit score if you make all the monthly payments and do not default. On the other hand, late payments can cause credit score damage.
You can use a signature loan to pay for weddings or vacations, too. However, it’s best to save your money to pay for luxuries like these.
In the end, a signature loan is a good idea if you can repay the loan and if the loan’s terms are better than your other options. To see the top-ranked offers, check out WalletHub’s picks for the best signature loans. You can also pre-qualify with multiple lenders using the free pre-qualification tool on WalletHub.
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