Signature Loan Requirements/Qualifications

A signature loan is a type of unsecured personal loan that requires only your signature for collateral. You personally vouch for your ability to repay the loan through the use of your signature, and you receive financing in return. While secured loans are typically less expensive because they are used with collateral, unsecured loans can be advantageous when you do not have collateral, or do not wish to use any. You will see a higher interest rate in general, but the lender will assume most of the risk of the loan. 

Fair to Good Credit

Unsecured loans are not typically an option for those people who have a bad personal credit history. Having at least fair credit will typically be a requirement when you are seeking a signature loan. For the two years prior to seeking your loan, you should ensure you do not have any late or missed payments on your debts. If you have previously defaulted on a loan or declared bankruptcy, you will need to wait even longer before a signature loan is an option for you. 

Low Existing Debt

Your debt ratio will come into play when you are seeking any new loan. While it is a good idea to make use of your credit by having a few credit lines, you should not over-leverage yourself. This means you should keep a low balance on your credit cards - less than 10% is best. You will want to have a mix of revolving and installment loans, but you should not have too many. Keeping your debt low but managing it effectively will increase your eligibility for an unsecured personal loan. 

Sufficient Income

While your debt is important, your debt to income ratio is more important. This means that your income will need to be high enough to justify your debt load and show you can afford another loan. If you have a very high income, a signature loan lender may extend you a loan even if you currently have a lot of debt or a low credit score. Specifically, you will benefit if you have been in the same job for more than two years and can show an increasing salary during that period of time.

Permanent Address, etc.

Your lender will need some assurance against your default including your signature. If you do not have a permanent address, you will not be an attractive borrower. Along with this address, any information you can provide to show you will not be leaving town easily is helpful. If your children are in school locally, you have other obligations in the area, or if you have a permanent job, you will be able to verify this with the lender. Without these assurances, meaning you are somewhat transient, you will not likely get a loan without collateral.


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