Signature Loans providers do not ask for collateral. Your signature itself is taken as security of the loan. So, lender is solely dependent on the promise you make for timely repaying of the loan. In other words main base of signature loans is lender's confidence and faith in the borrower. The more a borrower enjoys the lender's faith the easier it is to take signature loans.
Since signature loans are provided without collateral, the loan is ideal for tenants, non-homeowners and students. There is no restriction from lenders on utilizing the loan. One can make use of signature loans for clearing medical and education bills, enjoying a holiday trip or even for the purpose of debt consolidation.
How Much Can i Get ?
How much can you borrow by only putting your signature on a paper? Well it all depends on borrower's repayment capacity. Lender will judge repayment capacity through your annual income, bank statements of past many months and overall financial standing. Your credit history also plays key role. So, higher annual income and good credit history surely enable you in asking for a greater loan. Usually under signature loans lenders provide up to £15000. Repayment term for a signature loan varies from lender to lender. Banks give only one year while other lenders may offer larger repayment duration of up to 60 months. Signature loans are unsecured loans. Lenders have no property of borrower to sell it for recovering the loan. Hence signature loans are expensive loans. Higher interest is what the lenders may be looking for while providing the loan.
Can I Apply For That ?
Signature loans are given without many enquiries to bad credit people. This is because signature of the borrower is considered as a sort of collateral for the loan. People labeled as defaulters or having CCJs, IVAs, arrears with a bad credit score can apply for signature loan without hesitation. However, the repayment term of bad credit signature loan may be little shorter. Since the loan depends on lender's faith, the loaned amounts for bad credit people also may be little lower.
Where to source signature loans from ?
Number of signature loans provider have displayed terms-conditions on their websites. Compare them thoroughly and see who has the interest rate suited to your repayment capacity. Prefer applying online to the lender of your choice for faster processing and approval of signature loans.
Those with bad credit should be particular in paying off signature loans in timely manner. This way they can improve credit score which goes a long way in taking loans at lower interest rates in future. Make the best use of signature loans and restrict the borrowing to your requirements only to avoid debts.