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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

    • HDFC Bank Personal Loan
      "Good till date"
      0.5 5.0/5 "Blown Away!"
      I bank with HDFC Bank for the credit card and the offers and limit is good. I am able to access the card all over. There are no charges taken for the card. There are benefits like the cash back and rewards. It has been a good experience till date and I am happy with the services.
      Was this review helpful? 0
      , arrah
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Experience is good"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with Bankbazaar.com and there were no hassles in the overall process. The customer services and response is good and there were no issues to get connected with the banks. There were follow up calls and the website is good.
      Was this review helpful? 0
      , arrah
      Reviewed on May 26, 2018
    • HDFC Bank Personal Loan
      "Overall good"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan with HDFC Bank and the rate of interest is of 13.99% and the processing fee is of 2400. The document collection was delayed and after the paper work was taken I got the loan after two days. I got the loan amount as needed.
      Was this review helpful? 0
      , arrah
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Excellent services"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with Bankbazaar.com and there were no hassles in the overall process. The customer services and response is good and they were on time to reach out to me and provide me with the necessary details. There were follow up calls too. The website is also good.
      Was this review helpful? 0
      , raebareli
      Reviewed on May 26, 2018
    • HDFC Bank Personal Loan
      "High on ROI and charges"
      0.5 3.0/5 "Satisfactory"
      It is good experience with HDFC Bank as they collected the documents at the door step. The process was on time and I got it in 15 days. But the rate of interest is on the higher side it is of 15.5% and the processing charges was extremely high, it is of 17K.
      Was this review helpful? 0
      , raebareli
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Excellent services"
      0.5 5.0/5 "Blown Away!"
      I received an immediate response from Bankbazaar.com after I placed a request for the personal loan. I was provided with the necessary details and the arrangement for the document collection was also timely. The website is easy to use and understand.
      Was this review helpful? 0
      , vellore
      Reviewed on May 26, 2018
    • Fullerton Personal Loan
      "Good process"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with Fullerton, the executive came over to my place and collected the documentation for the personal loan. The process was completed in 15 days. I am not sure about the interest rate. The processing charges is around 8K. I got the loan amount as needed.
      Was this review helpful? 0
      , vellore
      Reviewed on May 26, 2018
    • IndusInd Bank Personal Loan
      "Good. Can be more quicker"
      0.5 5.0/5 "Blown Away!"
      It was a good process with Indusind Bank for the personal loan. Initially I was told that is a paper less process and later I had to submit the complete set of documents and I had to sign so many forms. They took a long time to disburse the loan too, they took two weeks. The rate of interest is of 12% and the processing fees was zero.
      Was this review helpful? 0
      , pune
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      It has been very good response from their side, there has been time to time responses. There has been good reminders. I have started using recently with the services. I have been using their application and it had been easy in using it. There has been no issues faced so far.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • Kotak Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      The overall experience i had with them had been very good. It took appropriate time in the process and i had received the loan in two weeks. The response from them had been very good, and there has been good solutions from their side. It has been a good quote and i was satisfied with the loan amount.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • ICICI Bank Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The process has been very good when i have taken this loan, it has taken almost a week to get this loan amount. The process was easy as i already had an account with the same bank. The loan amount had been satisfactory and i have taken it for my personal expenses. The rate of interest also had been less as well, it was 12%.
      Was this review helpful? 0
      , thane
      Reviewed on May 26, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      The overall loan experience had been very good and satisfactory. I have taken this loan for marriage purposes, the process has took more time than usual. But the customer service had been good, the rate of interest was a little high but which was 13%.
      Was this review helpful? 0
      , thane
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Good. Can do better"
      0.5 3.0/5 "Satisfactory"
      After I placed my request for the personal loan through Bankbazaar.com, they contacted me on time and informed me the details and processed it to the banks as well. It would be better if the Amazon gift voucher is sent to me on time and I should have followed up for it.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • Citibank Personal Loan
      "Satisfied"
      0.5 4.0/5 "Great!"
      The overall experience was good at Citibank and the it was a quick process to get the personal loan. The rate of interest is 12.99% and the processing charges is of 750 which is very minimal when compared to the other banks. It would be better if the EMI date is more flexible as my EMI date is on the 1st of every month and I am unable to change the same. When I contacted the bank I was told that it is the same date for all the customers. The disbursement was as per my need.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • ICICI Bank Personal Loan
      "No hassles"
      0.5 4.0/5 "Great!"
      I hold a personal loan with ICICI Bank and the process to get the loan is good. The documentation is minimal and there were no hassles to get my loan through. I was also comfortable with the rate of interest and processing charges. The after loan service is also good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 26, 2018
    • ICICI Bank Personal Loan
      "ICICI personal loan"
      0.5 4.0/5 "Great!"
      I have taken a personal loan from ICICI bank and the approved loan amount was 1.5 lakhs.The rate of interest was 11.50% and the monthly EMI comes around 3800 for a tenure of 4 years. There was a processing fee of 1% of the approved loan amount.
      Was this review helpful? 0
      , gaya
      Reviewed on May 25, 2018
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 4.0/5 "Great!"
      It was my first time experience with bankbazaar and the response from there end for the loan application was very excellent. They were so much professional and i got the loan approved on the right time. since i gone through bankbazaar i could able to experience the benefits with the team. I will consider them in future as well.
      Was this review helpful? 0
      , gaya
      Reviewed on May 25, 2018
    • Axis Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken this loan almost like six months back, the loan amount which they have been provided had been very good. The rate of interest has been fine. The whole process had been very easy and smooth and document submission also had been easy. I have got the loan amount in just two days.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 25, 2018
    • HDFC Bank Personal Loan
      "Good bank"
      0.5 5.0/5 "Blown Away!"
      From HDFC bank i have taken a personal loan and the approved loan amount was 3.6 lakhs. The rate of interest was 10.99% with a monthly EMI of 7921. The total tenure was for 60 months. There was a processing fee of 4000 has been charged. Pre closure can be done after 1 year of the loan approved date.
      Was this review helpful? 0
      , kochi
      Reviewed on May 25, 2018
    • ICICI Bank Personal Loan
      "Considerable bank"
      0.5 3.5/5 "Pretty good"
      My loan was got approved with ICICI bank but unfortunately i could not able to proceed with them as i have dropped the plan. If in future if i am planning to take the loan i can better consider ICICI bank if the rate of interest for the loan amount was feasible.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 25, 2018
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