Having the ability to walk in and talk to a lender and walk away with the money you need without having to have collateral is ideal for most consumers. However, this is only a possibility with a signature loan, which is a loan that you can obtain just by signing your name in agreement that you will pay the money back. To get this type of loan, there are three things a creditor will primarily be looking at when you apply. 

The creditor will look at your employment and income status.

To make sure you are worthy of getting a good-faith loan with just your signature as a promise to pay the money back, the creditor will want to know that you have stable employment. In most cases, a creditor will prefer a borrower who has a long-standing job. For example, someone who has been at the same company for five years may have a better chance of getting a loan than someone who has been employed consistently but only been with their current employer for six months. Likewise, the lender will be looking at your income to ensure you have had stable streams of money coming in for a while.

The creditor will look at your overall credit score and history. 

You typically have to have decent credit to qualify for a signature loan, and you can safely expect that your credit report, score, and history will be examined pretty closely if you apply for a loan. The credit score will of course matter, but more importantly, the creditor will be looking at things like:

  • whether or not you have delinquent or default accounts on your credit report
  • if you have ever fallen behind on payments and how far behind you have fallen with other accounts
  • how many accounts you have open currently
  • the age of the accounts listed on your credit report
  • how many accounts are in good standing compared to how many accounts were charged off

The creditor will look at your current debt-to-income ratio. 

Even though a creditor may not ask for this information, they can still gather a good idea of what loan payments you have going out every month by looking at your credit report and the current open accounts with monthly payments you have. By taking this information and comparing it to your income, a creditor can get a pretty good idea of whether you can afford a payment with them. Even though things like rent and utilities or bills not through a lender would not be examined, the basic debt-to-income ratio can be assumed when trying to get a signature loan with your credit report alone.

For more information about signature loan services, contact a company like Central State Finance Co Inc.