Finding a Signature Loan in OKC
Tuesday, Aug 1 2023
Are you looking for a personal loan that’s easy to obtain with few limitations? Finding a signature loan in OKC may be the answer. A signature loan, also called a character or good faith loan, offers a fixed rate for a designated term and is secured by your signature. You will not have to provide collateral to secure the loan. If it sounds too good to be true, it’s not.
Often used for medical emergencies, significant purchases, car repairs, home renovations, or debt consolidation, a signature loan could be the answer to your financial troubles and be an option when you need cash.
What is a Signature Loan?
A signature loan is a short-term personal loan. Unlike a secured loan, you don’t need to pledge collateral. There’s no need to trade valuable jewelry or belongings, drain home equity, or trade a vehicle for cash. And you won’t have to worry about losing those precious items if payments become outstanding or delinquent.
Although a signature loan doesn’t require collateral, you must still meet specific requirements. When determining eligibility, lenders weigh your financial situation, considering your credit score and debt-to-income ratio. Because a signature loan is unsecured, loan requirements are more stringent. Lenders look for a debt-to-income ratio below 36% and a credit score over 660.
Historically, a stigma was associated with the need to apply for a personal loan. People with poor credit scores were predominantly those applying for and securing loans. It was considered a last resort for people with a bad credit history and financial difficulties. But the stigma personal loans once carried has evaporated. They’re now a valid alternative for those who don’t have the time to build up savings and either don’t have or don’t want to turn to family or friends for help. And personal loans generally have a lower interest rate than credit cards, saving borrowers in total interest paid over the life of the loan.
What Are the Benefits of a Signature Loan?
While it’s always crucial to consider your financial situation carefully before taking on a loan, a personal loan can be extremely advantageous under the right circumstances.
Finding a signature loan in OKC can provide you with benefits, including:
- A Lump Sum. Loan amounts range from $500 or more. This range meets needs for various expenses, from minor emergencies to large home improvement projects. Once approved, the money is disbursed directly into your bank account.
- Predictable Monthly Payments. Payments are equal over a set amount of time. You’ll repay the loan in fixed monthly installments. Consistent payments will help you budget and plan.
- Fixed Interest Rates. When you get a signature loan, your APR, which includes your interest rate and any other fees, will stay the same until the loan is paid off. Personal loans typically have lower APRs than credit cards, and the rate doesn’t change. Credit cards may have a 0% interest introductory period that increases after the period ends.
- No Collateral. Your promise to repay the lender is the backing for a signature loan. You risk damaging your credit if you can’t repay, but you won’t lose an asset if you default on the loan.
- Credit Score Consideration. Your credit score and payment history will determine your loan eligibility. Lenders look for a credit score of 660 or greater.
What You Need to Know Before Getting a Signature Loan
Read the fine print no matter where you apply for a personal loan. A signature loan can be a positive tool for your financial goals, but it can make a bigger mess of a problematic money situation for certain people. Before you lock in on a specific personal loan, do your research.
When evaluating your options understand the following:
- Interest Rate. A signature loan has interest rates like any other loan. The difference is the interest rate could be higher on signature loans than on other loans. This rate is the result of no collateral as a loan requirement.
- Approval Process. Signature loans are lenient in requirements, and approval time can vary. Certain lenders can fund a loan within days, while others could take a few weeks.
- Fee Structure. Fees will vary with the lender. Know what fees a lender will charge and how it impacts your debts. Look for penalties, late payment fees, origination fees, automatic withdrawals, and additional costs.
- Customer Experience. Look for lenders offering convenient features like autopay, a mobile app, or flexible repayment options.
How Much Can You Borrow with a Signature Loan?
Signature loans at Focus Federal Credit Union are available from $500 and up, depending on your creditworthiness and ability to pay. The loan requires monthly installments until it is paid off. Once the balance is paid, the loan is closed. You can still enjoy the full membership benefits, like high-interest checking and auto loan discounts.
How Long Does the Signature Loan Application Process Take?
These loans rely on income, credit history, and credit scores rather than collateral. Focus Federal Credit Union looks for a solid credit history and sufficient income to determine your ability to repay the loan. You will need to become a FFCU member.
In some cases, you may need a co-signer for the loan. When a signature loan requires a co-signer, they become the responsible party if the borrower defaults. If the co-signer doesn’t pay the balance, the lender can pursue the co-signer through collections and court proceedings. The co-signers credit history and credit score could also have a negative impact.
What If You Don’t Make Your Payments?
Since there’s no collateral to repossess, what happens if you can’t make payments? That’s a good question. Although there is no collateral with a signature loan, it’s still a legally binding agreement.
If you default on your loan, the lender can take you to court for missed payments, and you may be turned over to a collection agency to collect payments. Any missed payments can be reported to the credit bureaus, and your credit score can take a hit. The blemish will remain on your report for seven years. After defaulting, it will take a while to secure another loan.
If you’re struggling to get a loan because of your creditworthiness, a signature loan may not be the best fit, and you may want to consider other options.
Options instead of a signature loan:
- Build Credit. While certain lenders prefer borrowers with robust credit profiles, personal loan options exist for those with less-than-perfect credit scores. FFCU offers choices, including a credit builder loan and fresh start loans.
- Bring in a Co-signer. Creditors may view it as less of a risk to lend you money because a second person is willing to take on the legal responsibility to repay the debt.
- Apply for a Secured Loan. Secured loans backed by collateral can be easier to obtain if you have a lower credit score.
- Get Debt Counseling. When considering your options, remember taking out a personal loan may not be the answer to your financial woes. Debt counseling can allow you to find other solutions, such as debt management, consolidation, or bankruptcy. When you have financial education, you make informed decisions. FFCU MoneyEdu is a resource to help.
Can You Use a Signature Loan to Consolidate Debts?
Yes, you can use a signature loan to consolidate debts. The best use of a signature loan depends on your financial circumstance. Debt payment is one way to use the money from a signature loan, but this type of loan can be something to consider for various needs.
A signature loan may be a good option for:
- Debt Consolidation. Americans have $986 billion in credit card debt. Signature loans typically have lower interest rates compared to credit cards, particularly if you have good credit. You can take out a loan, pay off outstanding credit card balances, and make one payment to your new personal loan servicer.
- Emergencies. Covering unexpected medical emergencies or car repairs are all uses for a signature loan. If you don’t have an emergency fund or the expense is too large, you can receive loan funds quickly.
- Home Improvements and Repairs. A personal loan can help you fund a home improvement project if you don’t have equity in your home and don’t want to borrow a secured loan. Unlike home equity products, personal loans often don’t require you to use your home as collateral since they’re unsecured.
- Life Events. The average cost of a local move is between $900 and $2,400, while an average wedding costs $30,000. If you don’t have the cash on hand, finding a signature loan in OKC can help you from raiding your savings or emergency fund.
How Do You Apply for a Loan with FFCU?
Applying for a signature loan at Focus Federal Credit Union is simple. We’ll communicate with you throughout so you know where you are within the system.
In general, the signature loan process is:
- Become an FFCU Member. To qualify for a signature loan, you must become an FFCU member. It’s a simple process and only takes a few minutes.
- Review Your Credit Score. Inaccurate information can lower your credit score. Review your credit reports before applying to ensure accuracy. You can obtain one free credit report every 12 months from the three major credit bureaus. If you find an error, dispute it with each credit agency to correct it.
- Complete a Loan Application. A loan application is required and can be completed in person, over the phone, or online. Information on the form includes name, employer, income, Social Security Number, contact information, bank statements, and a signature.
- Application Review. After submitting a loan application, our team will review your credit history, income, and credit score. Remember, there are many paths to qualifying for this loan, and we may recommend our credit builder or fresh start loans if needed. FFCU will discuss the predetermined interest rate and monthly payment amount. You will pay a higher interest rate if you have poor or bad credit. You’re sent the loan agreement to sign if your application is approved.
- Loan Approval. You’ll know whether the application is approved or denied in just a few days. Funds may be directly deposited into your account or provided to you via a check. Any applications denied are welcome to receive free credit counseling from one of our knowledgeable financial services representatives. Review the terms carefully before signing your loan documents.
How Long is the Repayment Period for a Signature Loan?
Focus Federal Credit Union will issue you a lump sum of cash. You repay the loan amount, plus interest, over the agreed-upon repayment period, typically 24 to 60 months. You can make payments through e-bill or by mail until the loan balance is zero.
Can You Pay Off a Signature Loan Early?
Paying off your balance as quickly as possible can help you save money in the long run. Making an extra payment each month or putting some or all of a cash windfall toward your loans could help you shave a few months off your repayment period. But even if paying off your loan early may be possible, you may not want to. Certain lenders may charge a fee for paying the loan off early. You’ll want to understand if there are any prepayment fees for paying off the loan early.
At Focus Federal Credit Union, you can pay off your signature loan early without penalty. This approach could allow you additional financial opportunities and improve your credit score.
Can You Refinance a Signature Loan?
A personal loan refinance lets you replace your existing loan with a new loan. Having a better interest rate or revised repayment timeline can be worthwhile. Refinancing to a longer term might be a good option if you need to extend your loan term or your credit score has improved, and you can obtain a more competitive interest rate.
Ready to Get Started?
Now that you understand how signature loans work, is it the right fit for you? Contact us with any further questions about qualifying for a signature loan in Oklahoma City, and we will answer any questions and concerns you may have.
Focus Federal Credit Union has been in business for more than 65 years. We take pride in being a trustworthy financial resource, educating our community and members on all things related to personal finance.