In today’s world, there are countless ways to get the money you need for business purposes, personal emergencies, and much more. However, many options pose a number of issues. Whether it’s very high interest rates or requiring an almost perfect credit history to qualify, there’s no doubt there are many options available to consumers. For those who do possess excellent credit as well as the income to easily pay back a loan, one of the best options may be a signature loan. If you’re in need of a substantial amount of money and are thinking a signature loan may be a good idea, here are four reasons to apply for this type of loan.
One of the biggest advantages of signature loans is that they are unsecured loans, meaning they do not have to be secured by such collateral as cars or homes. By not assuming such a large amount of risk in getting the loan, the borrower is able to have peace of mind while not having to worry about possibly losing their home or car if for any reason they cannot repay the loan. In addition, the loan will have a set period of time in which to be paid off, allowing the borrower to plan ahead for when the loan is paid off. More information about this can be found at Investopedia.
Along with being an unsecured loan, signature loans also have the distinction of being loans that are usually approved very quickly. In most cases, a borrower can walk in to the lender, fill out the paperwork, wait a few minutes while their credit score and income are verified, and leave with the funds they need. Since more and more applicants for these loans have good credit scores and higher incomes than in years past, banks and other lenders are often much more accommodating in approving their applications.
A Variety of Uses
While some loans may have certain restrictions as to how they may be used, most signature loans can be used for virtually any purpose. One of the most common reasons is unexpected expenses such as medical bills, which often need to be paid in a prompt manner. Other popular uses for these loans include home improvement projects, vacations, and debt consolidation. In fact, more and more borrowers are turning to signature loans to rid themselves of credit card debt. For example, if a borrower can obtain a low-interest signature loan at a rate that’s much lower than the interest rates on their credit cards, they will be able to save hundreds or perhaps thousands of dollars by consolidating the debt. Additional information about how to consolidate debt can be found at NerdWallet.
Banks and Credit Unions
While many people today find themselves turning to high-interest lenders such as payday or title loan lenders, that can often result in loans having interest rates of 300 percent or more. Instead of burdening themselves with loans that are almost impossible to repay, banks and credit unions have started offering more signature loans to their customers. A convenient option for long-time customers of these institutions, most of these signature loans will come with much lower interest rates and far better terms than other options. In many cases, a borrower can shop around for the best rates by contacting several banks or credit unions, then go to their own lender and see if they are willing to match another offer. Most of the time, the lender will match the offer rather than lose a long-time customer to a competitor.
“While more and more people find themselves deeper and deeper in debt today, the good news is that signature loans often provide a great way to let customers pay off large amounts of debt, cover unexpected medical expenses, or make improvements to their home,” said InstaLoan. Whatever the reason is for obtaining the loan, borrowers will be able to have the peace of mind needed to ensure their financial needs are being met in a fair and reasonable manner. So if you possess excellent credit and adequate income to pay off a loan, a signature loan may be just what you need.