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    Signature Loans

    A signature loan is a kind of personal loan or unsecured loan that is provided by lenders when the loan applicant gives his or her signature as an assurance that they will repay the loan without fail within a specific timeline. This signature of the loan applicant will serve as the sole collateral for the loan application. The borrower does not have to give any other form of security or collateral in order to procure this loan. The advantage of a signature loan is that one can apply for it for any reason. As a borrower, you will not have to specify the reason for taking a loan to your lender.

    A signature loan is sometimes called as a character loan or a good faith loan as it is offered solely on the basis of the borrower’s reliability and creditworthiness. The characteristics of signature loans are very similar to that of personal loans. You can get a signature loan from a bank or a non-banking financial corporation (NBFC) only if you prove to them that you will be able to repay the loan.

    Some lenders allow even e-signatures or digital signatures or online signatures for signature loan approvals. This is more common in countries like the United States. In India, signature loans are not too commonly available. You might find lenders after doing proper research.

    How does a Lender Approve a Signature Loan Application?

    When you approach a lender for a signature loan, the lender will check and evaluate your income, your employment status, your credit history, your bankruptcy history, and your credit score provided by CIBIL. If you have a high credit score, an impressive credit history, and a good monthly income, then a lender will accept your signature loan application.

    There are some lenders who may ask the borrower to make arrangements for a co-signer. This co-signer will be required to sign a promissory note and nothing else. In case the actual borrower misses any installment deadline or goes on to default the loan payment, then the lender will get in touch with the co-signer, where the co-signer will also be held responsible.

    Features of Signature Loans

    • You do not have to furnish any collateral or asset while applying for a signature loan. You only need to give your signature while applying for this loan. The signature is used as a promise from you.
    • The interest rates for signature loans are typically high as you do not have to submit any collateral. Signature loans are more expensive than secured loans as they are not secured by any collateral. Hence, lenders face more risk with signature loans. Therefore, lenders tend to charge higher interest rates for signature loans.
    • One should have high creditworthiness in order to apply for a signature loan.
    • You should not have missed any loan installments or declared bankruptcy at least for 2 years before you apply for a signature loan.
    • If you are a credit card user, you will need to keep a low due amount in your card so that your chances of getting the signature loan is higher.
    • The lender will check your debt-to-income ratio to decide if your signature loan application should be approved or not. With your income, you should be able to pay your existing debts and a new signature loan. If this is proven, then your lender will accept your application.
    • Signature loans are very helpful during financial emergencies as the application process is very short. If you meet the required eligibility criteria, your loan application will get approved in a jiffy. Even the documentation process is minimal and simple.
    • Signature loans typically follow fixed interest rates, wherein your interest rate will remain fixed throughout your loan tenure. This is very beneficial as your loan expenses will remain the same and you can plan your overall monthly expenses accurately.
    • The financing provided by signature loans will differ. Most often, signature loans offer up to 100% financing to take care of your financial requirements.
    • The processing fee for signature loans is similar to the processing fee for personal loans. In India, it typically ranges from 2% to 3% of the loan amount.

    Eligibility Criteria for Signature Loans

    • The age criteria can differ from lender to lender. Typically, the minimum age to apply for a signature loan is 21 years and the maximum age is 55 years. For some lenders, the maximum age requirement is 60 years. You can check with your bank or NBFC before applying for the loan.
    • The income criterion can also change from bank to bank. Ideally, your monthly income should be at least Rs.20,000 while applying for a signature loan.
    • To get a signature loan, your credit score from CIBIL should be at least 750. Some lenders may also accept scores above 625. Do check with your bank before you apply.

    Documents Required for Signature Loans

    To apply for a signature loan in India, you should mandatorily submit certain documents for providing proof.

    • Proof of address
    • Proof of identity and age
    • Proof of income
    • Aadhaar
    • PAN card
    • Latest bank statements
    • Latest salary slips
    • Passport-sized photographs

    Fees and Charges Associated with Signature Loans

    When you take a signature loan, you will need to pay certain fees and charges for enjoying the benefits of the loan. The common fees include processing fee, late payment fee, special service request fee, cheque bounce fee, etc.

    Uses of Taking Signature Loans

    You can apply for a signature loan and use it for numerous purposes and some of them include:

    • For wedding expenses
    • For your or your child’s higher education expenses
    • For debt consolidation
    • For home renovation or redecoration
    • For vacation expenses
    • For paying credit card dues
    • For purchasing a two-wheeler, etc.
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    Consequences of not Paying Signature Loans on Time

    • Charges: One of the most important terms and conditions of a signature loan is that you have to pay the loan entirely before the payment deadline expires. In case you fail to pay any equated monthly installment (EMI) for your loan or in case you struggle to repay the full loan, you will be asked to pay certain penalty fees or charges. Whether you make a partial payment, a late payment or a non-payment, you will have to pay certain charges that will be quoted by your lender. You can also check your loan policy document before you make the payment to avoid payment of unnecessary fees.
    • Impact on credit score: Apart from having to pay several charges, even your credit score will get affected negatively when you fail to pay your signature loan on time. Your credit score will be given by credit bureaus. In India, CIBIL prepares a credit report according to your debt habits and credit payment behaviour. This credit report information will give you your credit score. To avoid any negative effects on your credit score, you should make certain that you pay your signature loan installments on time.

    You can apply for signature loans offline or online. To apply offline, you can visit the branch of any bank or NBFC and meet a branch representative for assistance. You can submit the required documents in person and complete your loan application. To apply online, you can visit official websites of lenders or third-party lenders. Do compare fees and interest rates associated with each of the loan options. You can make comparisons and then pick the most suitable one.

    Since there is no need for submitting a collateral and since the documentation process is so simple, a signature loan is a great idea for multiple financial needs. Moreover, it is provided by a lender if you show yourself as a financially responsible and trustworthy borrower.

    Personal Loan Reviews

    • YES Bank Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I've take a personal loan from the Yes bank for 2 lakhs. It was not good, the associate told me 13.29% but the bank is charging 14 %. I am paying an EMI of 9803 for 24 Months. There were also hidden charges too when it comes to the YES bank with respect to personal loan.
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      , delhi
      Reviewed on Jul 14, 2018
    • Kotak Personal Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've taken a personal loan from the Kotak Mahindra bank. I have taken 1 lac, I got the loan with in 2 days. I applied online banking. The interest rate is low. It was a very fast personal loan experience with the bank and their services.
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      , pune
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    • HDFC Bank Personal Loan
      "Very good"
      0.5 4.0/5 "Great!"
      My personal loan was taken with HDFC bank 1 year back. The loan amount was 5 lakhs and the interest rate was satisfactory . The tenure period was 5 years . The process was very quick and satisfactory . I have got the loan with in a day. Here pre closure is after 3 months and the processing fee was bit high . My overall experience was good.
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      , navi mumbai
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    • SBI Personal Loan
      "Not satisfied"
      0.5 2.0/5 "Expected more"
      My personal loan was taken with SBI 2 years back.The loan amount was 2 lakhs and the interest rate as very high . The EMI period was 5 years .The process was very slow and they have delayed processing it .The documentation was smooth .hey did not sanction the loan within the committed time. Their processing fee was average in the market.
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      , hyderabad
      Reviewed on Jul 14, 2018
    • Tata capital Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I took loan personal loan from the Tata Capital for 4.25 lacs. I got the loan amount with in 15 days cheque. The interest rate was 14% initially and they reduced the interest rate to 13.5% Overall it has been a good experience so far. They need to lower the interest rates.
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      , chennai
      Reviewed on Jul 13, 2018
    • SBI Personal Loan
      "Very Good Service"
      0.5 4.5/5 "Excellent!"
      I had chosen to go with them since i was holding my salary account from the same bank. The process in getting the loan had been very easy and smooth. The loan amount which they had given had been okay and the interest rate with them had been nominal. There has not been any processing fee which they have charged. Their customer support and the staff responses had been helpful as well.
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      , kochi
      Reviewed on Jul 13, 2018
    • HDFC Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The process in getting the loan had been very smooth and easy and the loan amount which they had provided had been satisfactory. The interest rate with them had been average and there has not been any hassles faced during the process and with the staff responses. I have taken totally two loans from them.
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      , new delhi
      Reviewed on Jul 13, 2018
    • Bajaj Finserv Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a too expensive loan where the interest rate with them had been on the higher end. The process in getting the loan had been simple and smooth and the loan amount of 1.25L which they had provided me has been satisfactory. There has not been any hassle faced during the whole process and i am satisfied with the services of them.
      Was this review helpful? 2
      , chennai
      Reviewed on Jul 13, 2018
    • Bajaj Finserv Personal Loan
      "Very good"
      0.5 4.0/5 "Great!"
      My personal loan was taken with BAJAJ 1 years back. The loan amount was 1 lakh and the interest rate was bit high and the tnrue period was 2 years . The process was very immediate and hassle free . I have upload ll my documents through on line so i had smooth loan experience here .The processing fee was also nominal.
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      , bangalore
      Reviewed on Jul 13, 2018
    • Bajaj Finserv Personal Loan
      "Satisfactory"
      0.5 4.0/5 "Great!"
      My personal loan was taken with BAJAJ 6 months back. The loan amount was 1,40,000 and the interest rate was very high . The tenure period was 4 years . The process was very simply and the documentation was very simple. They have provide door step service for collected documents but the processing fee was bit high.
      Was this review helpful? 2
      , secunderabad
      Reviewed on Jul 13, 2018
    • Axis Bank Personal Loan
      "Very good"
      0.5 4.0/5 "Great!"
      My personal loan was taken with AXIS Bank 6 months back. The loan amount was lakhs and the interest rate was very high but the service was amazing . The tenure period was 36 months. I had a very hassle free process and smooth documentation.There is no processing fee and the pre closure is allowed after 6 months.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jul 13, 2018
    • HDFC Bank Personal Loan
      "Better service"
      0.5 3.0/5 "Satisfactory"
      My personal loan was taken with HDFC Bank 1 month back. The loan amount was 1,90,000 and the interest rate was very satisfactory . The customer service and responses was good. The tenure period was 3 years .The staffs were very supportive and guided well. The processing fee was very nominal.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jul 12, 2018
    • HSBC Bank Personal Loan
      "Very good service"
      0.5 5.0/5 "Blown Away!"
      I took a ,personal loan from the HSBC bank. The loan amount was 6 lacs, I applied for the loan via an HSBC executive. I got the loan with in 3 days, it was quick. The interest rate is higher side but they promised that there will be a revised rate soon.
      Was this review helpful? 1
      , new delhi
      Reviewed on Jul 12, 2018
    • HDFC Bank Personal Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I took a personal loan from the HDFC bank. The loan amount was 15 lacs, it was quite fast and the processing was very fast. The interest rate was low when comparing to other banks. Overall it has been a very good loan experience with the HDFC bank.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jul 12, 2018
    • Citibank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It had been a very good experience i had with them in taking this personal loan where the process in getting the loan had been easy and smooth where the loan amount also had been satisfactory. The interest rate had been good with them where it was not much higher. There has not been any hassle so far.
      Was this review helpful? 1
      , kolkata
      Reviewed on Jul 12, 2018
    • ICICI Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a personal loan with ICICI bank and my loan experience was good, the loan amount was for Rs 2 lakhs with nominal interest rate when compared to other banks. I received my loan amount on time and there are no preclosure charges. The tenure period for this loan is 2 years.
      Was this review helpful? 2
      , ahmedabad
      Reviewed on Jul 12, 2018
    • Citibank Personal Loan
      "Very Good Service"
      0.5 3.5/5 "Pretty good"
      I had taken this loan almost a year back and it had been a very good experience with them. The loan amount which they where providing had been satisfactory and the interest rate with them has been okay and it was not that high. There has not been any issues faced with the services of them.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jul 12, 2018
    • ICICI Bank Personal Loan
      "Go for it"
      0.5 5.0/5 "Blown Away!"
      ICICI is extremely is good in all their products. I have purchased this personal loan 4 months back. They have provided me interest rate 14.75% which is very nominal and processing fee is Rs. 2000. I used to pay the EMI of Rs. 4850. Actually i have applied two times with ICICI due to credit score it got rejected for the first time and the second time it got approved. They are providing the excellent customer care services.
      Was this review helpful? 2
      , surat
      Reviewed on Jul 12, 2018
    • Bank of India Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a very good experience i had with them and the loan amount which they had provided had been satisfactory and the interest rate with them also had been good as well. The services from the staff and their customer support also had been well and good.
      Was this review helpful? 2
      , mumbai
      Reviewed on Jul 12, 2018
    • ICICI Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The process in getting this loan from them had been good and the loan amount which they had provided had been satisfactory. The interest rate has not been too much high or too much low when compared with the market. There has not been any issues faced and their customer support also had been very good where they had been helpful at times.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jul 12, 2018
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