Do you have bad credit and need a personal signature loan? A loan you can just sign for and walk away knowing you were approved and the money is in your checking account? Join the club – a big club! What differentiates a conventional personal loan from a signature loan is the manner in which the loan is approved and the manner in which the borrower is approved without any kind of collateral or security on the note. Before we discuss the approval of your signature loan and talk about the links and contact information of lenders who approve signature loans to borrowers with bad credit, we need to break down precisely what this lending product is, and how it effects your bottom line when you have paid back all the borrowed monies in full. There are some serious consequences involved if you let this kind of borrowing get completely out of hand and out of control, and we want to go into this a little bit today.

First let’s break down Signature Loan as described in the title of this post;

BAD CREDIT = a borrower with a lower than average credit rating, a low FICO score, and negative payment history with other creditors in the recent past (within the last 7 years usually)

PERSONAL = meaning the loan is for an individual and not for a business. A personal loan usually means that the borrower is not buying a product that borrower can hold as security. This kind of loan is simply cash money that you can spend on anything you want – not a car, boat, motorcycle, truck, house, etc. Straight up cash loan for any purpose – you decide.

SIGNATURE = meaning that the only kind of security the borrower is offering to the lender is their signature on a promissory note promising to repay the cash back within a predetermined amount of time as per the lending/borrowing agreement. This kind of security (your hand written signature) is not consider security by a bank or private lender. The was a time when a promissory note meant something and money was approved for disbursement based on that alone – those days are pretty well done now, unless you use a loan shark, which you don’t want to do.

LOAN = obvious – borrowing money from a lender

The Reality of a Signature Loan Whether You Have a Good or Bad Credit Rating

As mentioned above, a signature loan is defined as a loan whereby your signature on a piece of paper is enough to get you approved – the reality is that finding a lender willing to lend you money in this scenario far and few between. Even a Payday loan lender wants your next paycheck signed over to them. The idea of finding a signature loan approval is like finding Bigfoot, a Flying Saucer, or Waldo. We did a little looking around and posted some actual lenders that provide signature loans (which we have posted already many times – you can use the search function at the top right to find the signature loan posts with the links, contact information, etc.) Keep in mind one thing though – these kinds of loans are very costly – indeed!

Your average signature loan interest rate, or APR comes in at around 15%-25% which can bleed you dry over time, and the sad part is that some borrowers who are desperate end up talking out two loans at rates this high. If a lender is still will to lend to them they will often take on so much debt, at such high rates, they end up going bankrupt as a result. We’re going to avoid this right!

You’re probably wondering why I’m “trashing” signature loans so hard – why? Because they are hard to come by unless you are dealing with a loan shark or a predatory lender, or perhaps a relative (even worse The interest rates are really high, and the penalty fees are ridiculous. It’s a last ditch effort, and if you ever do borrow money this way, you need to pay it back quickly. Pay it all back as soon as humanly possible. I remember borrowing money with absolutely no collateral or security on the cash – I borrowed it from the wrong person too. I was only 19 years old at the time and I borrowed the money from a “guy named Joe” (no fibbing – true story). He ran a pool hall and was basically your old time Loan Shark kinda dude. I borrowed 3 grand from him to pay off some debts I had (which I will not go into detail about because it’s embarrassing history). No lie – this was the seventies and it sounds so cliche, but this does happen in real life. I was afraid of him so I worked 2 jobs and did odd jobs on the neighborhood to make sure he got all his money back. Here is the problem – even after you have paid back all the principal and the interest to a lender like this, they figure you now own them something. About 5-6 months later he asked me to do something for him that was illegal – I said no, and luckily I was leaving Vancouver the next week.

The reality is that whether you like it or not, if you have a bad credit rating, you will paying through the nose to someone who will be taking advantage of your desperate situation – this isn’t cool. You need to move on with other ideas, and perhaps start all over with financial planning (and for many people that means no planning). Always remember that it’s just money we’re talking about here and it’s never something to get hung about, or owe a loan shark over. What is worst thing that can happen? You will lose your credit rating all together, and have to rebuild your credit bureau status over time.

If, however, you are bound and determined to apply for a signature loan, get approved for a signature loan, and actually sign the dotted line of a nasty loan agreement, then by all means, go with the flow and have that learning experience. Please take my advice and pay back the loan ASAP!