Signature loans with no credit check seem like a good idea in theory, but borrowing money this way can be far more expensive than other options. Because lenders have to make loans without the benefit of checking the applicants credit score and knowing their borrowing history, these loans tend to be pricier than normal loans and with more fine print.
If youre considering a signature loan with no credit check, you should know how these loans differ from other funding options like traditional unsecured personal loans, in addition to how much more they may cost you.
Having bad credit can make getting approved for loans more difficult. However, there are still options for borrowing money even if your credit score is not the best. One type of loan that may be accessible for bad credit borrowers is a signature loan.
What is a Signature Loan?
A signature loan is a type of unsecured personal loan that is granted based on your creditworthiness and income instead of collateral They are called “signature” loans because your signature on the loan documents is your promise to repay the debt Signature loans can range anywhere from $1,000 to $100,000 depending on the lender.
Unlike secured loans, signature loans do not require you to put up any assets like your home or car as collateral This makes them riskier for lenders, which is why strong credit scores are usually needed to qualify However, some lenders are willing to work with bad credit borrowers if other qualifications are met.
Benefits of Signature Loans for Bad Credit
There are a few advantages to considering a signature loan if you have bad credit:
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Fast funding – Signature loans can provide you with cash quickly, sometimes as fast as the next business day once approved. This makes them useful for covering emergency costs or expenses that can’t wait.
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Fixed payments – Signature loans have fixed interest rates and monthly payments over a set repayment term. This allows you to budget the predictable payments each month.
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Improve credit – Making on-time payments on a signature loan can help rebuild your credit score over time. Payment history makes up a significant part of your credit score.
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Consolidate debt – Signature loans allow you to consolidate multiple debts into one monthly payment at a potentially lower interest rate. This can make managing payments easier.
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Flexible use – Money from a signature loan can be used for any purpose since they are unsecured personal loans. This gives you flexibility in how you use the funds.
What Credit Score is Needed?
Each lender has their own minimum credit score requirements. Here are some general guidelines:
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Excellent Credit (720+) – Interest rates as low as 4-6% may be available from some lenders like credit unions and banks.
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Good Credit (680-719) – Interest rates average 10-15% for borrowers with good credit. Online lenders often approve in this range.
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Fair Credit (640-679) – Interest rates from 15-30% are common. Approval still possible but higher rates.
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Poor Credit (580-639) – You may still get approved but with interest rates from 25-36%. Fees also usually higher.
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Bad Credit (Below 580) – Qualifying for a signature loan will be very difficult. Consider secured loan options instead.
As you can see, the higher your credit score, the better chance you have of getting approved at lower interest rates. But even with bad credit, approval is still possible if you find the right lender.
Where to Get Signature Loans for Bad Credit
If your credit score is lower, you’ll need to look for lenders that work with bad credit borrowers. Here are some places to consider:
Online Lenders
Online lending companies are often more willing than banks to approve those with poor credit. Some top options include:
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Upstart – Minimum score of 600 and APRs from 7.69% to 35.99%
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Avant – Minimum score of 580 and APRs from 9.95% to 35.99%
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LendingPoint – Minimum score of 600 and APRs from 15.49% to 35.99%
Peer-to-Peer Lending
Peer-to-peer lending networks like Prosper and LendingClub allow individual investors to fund loans. They may offer higher approval rates for bad credit borrowers.
Credit Unions
Local credit unions want to serve their communities. If you’re a member already, check to see if they offer signature loans for bad credit borrowers.
Banks
While banks typically require good credit, it doesn’t hurt to ask about signature loan options for bad credit. Pre-qualification is easy and doesn’t hurt your credit.
Subprime Lenders
Companies like OneMain Financial and NetCredit specialize in lending to borrowers with credit challenges. They provide loans from $1,500 up to $20,000.
What is Needed to Apply?
At a minimum, most lenders will need:
- Your full legal name
- Date of birth
- Social Security number
- Contact information
- Income and employment details
- Bank account & routing numbers (for depositing the loan)
You’ll also complete a loan application that asks for details on your income, expenses, debts, and credit history. Approval decisions are usually very fast.
Improving Your Chances of Approval
Even with bad credit, you can boost your chances of qualifying by:
- Having steady income. Verify it with pay stubs or bank statements. Self-employed may need tax returns.
- Lower debt-to-income ratio. Don’t take on new debt before applying.
- Putting down larger down payment if required.
- Having a co-signer with good credit cosign the loan.
- Building credit – pay all bills on time leading up to your application.
- Checking your credit report for errors to dispute. This can quickly boost your score.
- Asking a family member for a credit builder loan. Make small monthly payments and then they repay you the money at the end. This establishes positive payment history.
What is the Process of Getting Approved?
Follow these steps when applying for a signature loan with bad credit:
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Compare offers – Check rates and terms from multiple lenders either online or locally. Avoid having too many hard credit check by comparing pre-qualification offers first.
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Choose a lender – Select the loan with the most favorable rates, fees, and terms that match your budget.
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Complete application – Apply directly through the lender by providing all required personal and financial information. This usually includes permission for a hard credit inquiry.
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Get approved – The lender will review your application and make an approval decision within minutes to a few days depending on their verification process.
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Accept loan terms – If approved, the lender will present you with the loan agreement outlining all rates, fees, and repayment terms for your review and acceptance.
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Receive funds – Once you sign the agreement, the lender will deposit the loan funds directly into your designated bank account, often as fast as the next day.
Then you repay the set monthly payments until the principal plus interest is paid in full. Defaulting on the loan has consequences for your credit so be sure you can afford the payments before borrowing.
Alternatives to Explore
If you aren’t able to qualify for a signature loan with bad credit, some other options to consider include:
- Borrowing from friends or family
- 401(k) or pension loan if available through work
- Low interest credit cards for a small loan amount
- Secured loans using collateral like a vehicle title loan
- Payday alternative loan from a credit union
- Pawning or selling assets you own
- Debt management program through a nonprofit credit counseling agency
- Debt consolidation through a Federal Student Loan or Medical Debt Loan
The most important thing is to avoid very high cost lending options that will just put you further in debt. Explore all smart possibilities even if your credit score is not ideal.
Summarizing Signature Loans for Bad Credit
As you can see, there are lenders willing to work with bad credit borrowers on signature loan approval. Just remember interest rates and fees will be higher than those with excellent credit. Compare all of your options thoroughly and make sure you have a stable income and can truly afford the monthly payments. With bad credit, a signature loan may still be possible to help you access funds more quickly than other alternatives.
Signature Loans With No Credit Check: Pros & Cons
Payday loans are expensive overall, so you should look for more affordable borrowing options. That said, there are a few reasons people use these loans.
- Get funding regardless of your credit score
- Few approval requirements
- Solve financial problems in the short term
- Expensive
- Can create a cycle of debt
- No credit building
Payday Loans vs. Traditional Signature Loans
Heres how payday loans compare to traditional personal loans based on several key factors.
| Signature Loans With No Credit Check | Traditional Personal Loans | |
| Typical Interest Rates | 400% APR or higher | 5.99% to 35.99% APR |
| Typical Loan Limits | $500 to $1,000 | $1,000 to $100,000 |
| Typical Repayment Terms | Two weeks to 60 days | 24 to 84 months |
| Collateral Required? | No | No |
| Fees | Fee amounts vary | Origination fees vary; potentially as high as 12% |
| Minimum Credit Score | N/A | Varies, but typically fair credit or better |
3 BANKS NO CREDIT CHECK Personal Loans Bad Credit LOANS TOP 3 Lenders 15 Second APPLICATION
FAQ
What credit score do you need for a signature loan?
Are signature loans hard to get?
How much is the monthly payment on a $5000 dollar loan?
|
Loan Amount
|
Loan Term (Years)
|
Estimated Fixed Monthly Payment*
|
|
$5,000
|
3
|
$153.54
|
|
$5,000
|
5
|
$104.98
|
|
$10,000
|
3
|
$313.32
|
|
$10,000
|
5
|
$207.54
|
What is the minimum credit score for a loan?
Can you get a signature loan with bad credit?
Because signature loans rely heavily on your credit score, it will likely be difficult to qualify for a loan with a bad credit score. While there are signature loans for bad credit, if you do qualify, you’ll likely get matched with APRs as high as 36%. Bad credit signature loans aren’t your only option, however.
How hard is it to get a signature loan?
Signature loans are significantly harder to get than secured personal loans. They often require a credit score of at least 660 for approval, and some even require scores of 700+ (good credit). There are a few signature loan providers that service people with credit scores as low as 580, but they are less common and have very high APRs.
Are signature loans a good idea?
Sure, signature loans can have very low rates for people with excellent credit, starting at around 4% to 6% with the best lenders. But borrowers with lower credit scores are likely to get a much better rate on a secured personal loan than on a signature loan. This is due to the greater risk for the lender with a signature loan.
Are signature loans more expensive than secured personal loans?
Signature loans tend to be more expensive than secured personal loans. Sure, signature loans can have very low rates for people with excellent credit, starting at around 4% to 6% with the best lenders. But borrowers with lower credit scores are likely to get a much better rate on a secured personal loan than on a signature loan.