It’s common for our visitors to be looking for a fast personal loan on a signature basis, meaning they have no collateral and good credit. If you have bad credit your odds of getting approved for a signature loan are rather dismal these days because the banks are reluctant to approve even good credit applicants. If you’re serious about being approved for a fast personal loan you must understand that you have to have a squeaky clean reputation for making your payments on time and honoring all your loan agreements.

The Principles of a Signature Loan

The biding principles of a signature loan are as follows. You must have a high FICO score in the range of 720-760 (or higher), and you must have full-time employment and have been living at the same residence for over three years. These are just some of the criteria you must have before even considering this kind of loan.

With a signature loan you don’t need to have collateral or any kind of asset involved as far as the bank tried to secure your funding. The truth is that most people cannot be approved for such a loan because they’re credit rating just isn’t strong enough.

Often we have visitors at CLF who are looking for signature loan and they have bad credit, and using these words in the same sentence is a perfect oxymoron – it just isn’t going to happen.

Alternatives to a Signature Loan

If you are one of those applicants who suffers from a poor credit rating there are alternatives to a signature loan. If you have some form of security you can provide to the bank such as a car or real estate then you have an opportunity to possibly gain approval with your local bank or online non-conventional lender.

If you only need a quick $5,000 or $10,000 you can likely get approval and have the moneys in your checking account within a week if you can apply for a loan using the equity in your house or the value in your car or boat, or anything else that has appreciable value.

As I have mentioned in other articles there are some scaled-down lending types such as car title loans, payday loans (usually as high as $1500), and pawn shops. I know that pawn shops have a nasty reputation as so do payday and car title loans but they are legal forms of lending and the free world, so I would be remiss if I did not mention them. If you can afford to avoid these types of loans you should but sometimes that just isn’t another alternative.

History of the So-Called Signature Loan – The Promissory Note

Signature loans to have a history in the modern world in countries such as the United States, the United Kingdom, Australia, Canada, New Zealand, and many many more countries. It goes back to what used to be called a promissory note.

From the dawn a lending and banking it has always come down to what was called a promissory note. Centuries ago a promissory note could be nothing more than what it sounds like – a note of paper with your mark on it (a mark if you couldn’t write or signature if you could write) promising to repay the loan or advance at a certain time, for a certain cost, and certain place.

Promissory notes were used for simple trading in the 1800s between farmers and service providers. For example, a wheat farmer who needed to feed his family through the treacherous, cold, and barren winter would give a promissory note to a sheep farmer stating that he would repay the sheep farmer in bushels of wheat during the summer harvest if he could take a sheep to his family to make woolen clothing from the hide and stockpiled meat for the winter.

This would be the true essence of how signature loans came about. In many other countries the promissory note was not use of all and a simple handshake and verbal promise was all that was required to make a trade that concluded at a later date.

In Conclusion

You will most likely need to be looking for approval with a non-conventional lender unless your FICO is excellent, you have equity, and you have “bankable” employment.

Because of the current state of the US economy, and the current willingness of conventional lenders to lend money, it’s a simple scenario. Two situations for a signature loan;

1. consumer financing company with near-perfect credit rating and payment history (reasonable APR)
2. non-conventional lender (extremely high fees and high APR)