What is a signature loan?
If you need to walk into a bank to take out a loan that isn’t for a car or a home, you probably need a signature loan. You don’t have to give the bank a reason for a loan of this type.
What can these loans be used for?
People use these loans for a lot of different things including medical procedures, cosmetic surgery, home renovation, education, unexpected expenses, bills, and shopping. The whole point of these loans is that you don’t have to justify a reason to the bank and you don’t have to provide collateral.
What are interest rates like on these loans?
You should plan on paying at least 4 percentage points higher than you would for an auto loan, and 5 or 6 points higher than you would expect to pay on a home loan.
These loans have higher interest rates because you don’t have to put down collateral. If you’re worried about the interest rate, you should be taking out a loan on a vehicle or you should look at getting a home equity loan.
What are interest rates like on bad credit signature loans?
Traditionally speaking, these loans aren’t offered to individuals with bad credit. However, there are some companies that have put together loans for this situation. However, you should expect to pay around 20% interest if you take them out. This is because there’s no collateral and you have a history of NOT paying your bills on time.