How Do Signature Loans Work: All You Need to Know
How it works, Signature loans are one of the most flexible financial solutions available to you.
For people who do not want to provide collateral, signature loans are a great option.
Furthermore, signature loans typically have an easy and fast process – faster than other types of quick loans.
So no matter what you’re going through, PaydayMint is here to help with our signature loans. Apply today, and we will assist you with your financial needs.
WHAT IS A SIGNATURE LOAN? HOW DOES IT WORK?
A signature loan – also called a good faith loan or character loan – is an unsecured loan that you can get by providing a lender with your income, credit history, and signature.
This means that if you have good credit scores, a steady flow of income, and valid IDs, your signature loan will easily be approved.
The big upside of signature loans is that you do not have to provide any collateral. Your application approval, loan amount, and payment terms will depend on your credibility.
And while a good credit score helps, it’s not the only factor that signature loan lenders consider. Because of this, it is possible for people without bank accounts or credit cards to get a signature loan.
Unlike banks that immediately reject an applicant based on their credit score, Tiempo Loans is dedicated to providing financial assistance even to people without credit scores.
HOW DO YOU QUALIFY FOR A SIGNATURE LOAN?
Getting a signature loan means you’re vouching for your ability to repay the loan without any collateral. This also means that the lender will assume most of the risk. So, it’s essential that you can establish your credibility. Here are some of the qualifications you could consider when you apply for a signature loan:
1. Source of Income
Your source of income is the most important qualification when applying for a signature loan. Since you won’t have any collateral, a lender will need proof that you can repay your loan. But, aside from having an income, a lender will check the amount of income you get to take home. The higher your income, the better. This gives the lender more confidence in providing you with a low-interest rate.
Providing your payslips for multiple jobs is also better than providing only one source of income. The goal with Signature Loans is to build credibility through the documents that you provide.
2. Proof of Identity
You would be required to produce proof of identity when applying for a loan. This would include providing copies of your valid IDs. Your valid IDs would be checked against any of your submitted documents to check for consistency.
Aside from a valid ID, you would also need to provide your Social Security Card or Social Security Work Card (TIN #). Your Social Security Number (SSN) would help the lender confirm your sources of income. Confirm your SSN with your SSN awards letter. You can request this benefit verification letter online via your my SocialSecurity account.
Another proof of identity would be character references. References would help the lender verify that you are reliable, credible, and honest. Before funding your loan, the lender may call any of the personal references you’ve indicated and ask them verification questions related to your submitted documents. Ask your supervisor, landlord, and family if they are willing to be your references. Make sure they’re aware of being a personal reference so they won’t be surprised when someone calls them to ask about you.
3. Permanent Address
Another way to build confidence with your lender is the assurance that you are not leaving town any time soon. If you do not have a permanent address, you won’t be an attractive borrower. So, make sure to provide your permanent address on your loan application.
Before applying for a signature loan, make sure to secure any utility bill in your name that shows your permanent address. If you’re renting your apartment, bring in tenant certification from your landlord, so it’ll be easy for your lender to confirm.
4. Low Existing Debt
If you have any outstanding debts, make sure that you have paid most of them before applying for a signature loan. This will be a huge factor in your signature loan approval.
If you have credit cards, it may be best if you could keep them at a low balance. A balance of less than 10% of your credit card debt would be great. However, if you have a high balance, at least make sure you are making consistent payments. Remember, you need to prove to your lender that you can pay off your loans despite not having any collateral.
5. Fair to Good Credit
Having good credit is not the highest factor for getting a signature loan. It also makes it easy for the lender to approve your application faster. Months before applying for a signature loan, consider consistently paying your bills and other debts on time.
HOW IS IT DIFFERENT FROM PERSONAL LOANS?
Both signature loans and personal loans are a type of unsecured loans. Mostly, personal loans are given by banks. When you get a personal loan from a bank, you would need good credit scores to get approved. Aside from good credit scores, you would need an account with the bank to establish a relationship with them.
Signature loans are great options for anyone who does not have a bank account. According to the Federal Deposit Insurance Corporation (FDIC), 6.5% of U.S. households, or an estimated 8.4 million households, do not have any bank accounts. Additionally, 18.7% of families in the U.S. were underbanked in 2017. That’s an estimate of 24.2 million households who rely on other financial companies outside of the banking system, despite having bank accounts.
Getting a signature loan is an excellent financial option to cover sudden expenses. At Tiempo Loans, we can approve your loan application in one day, provided you can submit all necessary documents.
HOW DO YOU GET A SIGNATURE LOAN?
Getting a signature loan is easy. You may apply for your loan online or visit one of our six offices in Texas.
When applying online, fill in the information needed. Once done, you will be contacted by one of our agents to discuss options. Make sure to ask any questions to our agent during the call. After the call, you will be invited to come to our offices to submit your documents. Our agent will also remind you of what you need to bring.
When you get to the office, submit your valid ID, Social Security Card, or Social Security Work Card (TIN #), proof of income, utility bill, and six personal references. Our agents will immediately process your application. After we have verified your documents and application, you will get the results. Once approved, your money will also be released. By the end of your visit, you’d already have the funds for your sudden expenses.
WHAT DOCUMENTS DO I NEED FOR A SIGNATURE LOAN?
For faster processing, get the following documents ready for your signature loans:
- Loan application (you may fill this in online)
- Valid ID
- Social Security Card / Social Security Work Card (TIN #)
- SSN awards letter (get it online from your my SocialSecurity account)
- Proof of income (i.e., pay stub, payslip, certificate of employment)
- Utility bill
- Six personal references
Remember that getting approved for a signature loan relies on you convincing the lender that you are reliable, credible, and honest. Make sure all your documents are complete and error-free.
Also, the information on your documents should be consistent. For example, the address on your IDs should match the address on your utility bill. If you were renting and had to move to a different apartment, make sure to update your records first before applying for a signature loan.
Provide the latest version of your payslip or pay stub, utility bill, and SSN awards letter. Giving versions that are more than a month older could make your application questionable. Also, remember to inform your personal references to expect a call from PaydayMint.
That’s it! As long as you provide these documents, you won’t need to worry about not getting approved.
Make sure to partner with your trusted local provider for your signature Loans. At PaydayMint Loans, we make sure that all your personal data will be kept safe. Our operations comply with the standards set by the Office of Consumer Credit Commissioner (OCCC). We are also a proud member of the Texas Consumer Finance Association.
Plus, PaydayMint Loans aim to provide a win-win interest rate to make sure you won’t be trapped in a cycle of debt. Apply now!
FREQUENTLY ASKED QUESTIONS ABOUT SIGNATURE LOANS
Here are some of the most frequently asked questions about signature loans:
How Long Does it Take to Get Approved For a Signature Loan?
Signature loans are one of the fastest ways to get cash. If you are qualified and provide all the documentation, it typically only takes a few days for you to get the money.
Once you submit your application, our team will review it and give you a call if you qualify. From there, all you have to do is visit the branch with your documents, and you can walk away with your cash.
Is It Easy to Get a Signature Loan?
If you have a credible history and have the 5 qualifications listed above, getting a signature loan is super easy.
However, if you are missing something, getting approval for a signature loan can be challenging. Remember, there is no collateral involved. The lender is at high risk in these transactions.
What Credit Score Do You Need for a Signature Loan?
Because of the way signature loans work, there is no minimum credit score requirement for a signature loan. However, a good credit score will always help you get approved.
A credit score of over 700 will get you approved most of the time. Meanwhile, your credit score may go as low as 585, provided you have the five qualifications listed above and can prove your credibility.