What does signature loan mean

One potential use of a signature loan is debt consolidation. For example, if you can consolidate multiple high-interest credit cards into one installment loan at a lower rate, you could potentially save money on interest.

Other potential uses for signature loans include medical bills, wedding expenses and major home improvement projects. Unsecured loans are available from a range of lenders, like traditional banks, credit unions and online lenders.

The biggest downside to taking out a loan of any type is the cost. Borrowers with good credit may qualify for better rates and more favorable terms, while the choice of loans for applicants with less-than-perfect credit histories may be limited and come with higher interest rates. Review all loan terms, including fees, before signing up for a loan. Here are some important items where you should be sure to pay attention.

Check with your lender and read all loan documents to get details for all of the potential costs of your signature loan. Applying for a signature loan is usually easy and perhaps faster than some other kinds of quick loans , though getting approved may be a challenge — it depends on your credit health. What is Precautionary Motive? Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously. Register now to create your own custom streaming stock watchlist.

Bad Login - try again. Forgotten password? Don't have an account? Register Now. Search for a Term:. Gulf Keystone. GKP Chart. Term means the loan is amortized over a predetermined time period and paid off in equal monthly installments. As soon as a signature loan is paid off, the account is closed, and the borrower needs to apply for a new loan if they require additional funds. In contrast, a revolving credit account allows the indebted party to repay the loan and maintain the line of credit until the borrower or lender chooses to end the relationship and close the account.

While the purpose and structure of signature loans have not changed over the years, financial analysts report that the profile of the average borrower accessing signature loans has changed. In the past, borrowers with poor credit scores tended to take out signature loans, but as interest rates have fallen and loan maximums have increased, many borrowers with good credit and high income have also turned to these loans.

Adding a co-signer on a signature loan may help a borrower with a minimal credit history or a low income. These borrowers use signature loans for a range of purposes, including home improvements , unexpected expenses , medical bills, vacations, and other large expenditures. Some borrowers also use signature loans to consolidate other debts. The borrower then uses the signature loan to pay off the credit cards in full. If you're thinking about taking out a signature loan, then a personal loan calculator could be useful for figuring out what the monthly payment and total interest should be for the amount you're looking to borrow.

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