Signature Loans: Definition, Types and Benefits

A signature loan is a type of unsecured personal loan that is typically easy to apply for — often requiring only your signature, a few pieces of documentation, and a promise of repayment. As unsecured loans, signature loans don’t require collateral like a car or house and can have advantages over other types of loans.

How do signature loans work?

Signature loans are straightforward in how they operate. Once you get approved for a signature loan, the money gets deposited directly into your bank account, and you're free to use it for whatever you like. You'll also receive the money as a lump sum.

Signature loans typically offer fixed repayment terms, so you’ll repay the money according to the lender's schedule. In most cases, you repay the loan in regular installments rather than all at once (Payday Loans are an exception).

What can you use a signature loan for?

Signature loans are very flexible, and you can use them for a wide variety of reasons. Common uses include emergency expenses, medical bills, and home repair projects. You can also use a signature loan for debt consolidation, which allows you to manage multiple repayments through one convenient loan.

How to apply for a signature loan

You will need proof of a stable income to apply for a signature loan. This means providing copies of your paycheck stubs, bank statements, and other supporting documents. Additionally, because signature loans are unsecured loans that don't require collateral, you typically need a good credit score to receive one from a traditional bank or credit union.

Advance America signature loans

Advance America signature loans, including Payday Loans, Installment Loans, and Lines of Credit, don’t require you to have good credit. Instead, we look at your employment history and proof of income when making our decision.

Do you need good credit to get a signature loan?

Not necessarily. In most cases, if you don't have good credit and want a signature loan from a traditional lender, you will need someone with good credit to co-sign the loan. But alternative lenders like Advance America will work with you to find the right loan to meet your needs, regardless of your credit history.

Benefits of signature loans

There are many reasons why you might choose a signature loan over other loan options.

Signature loans are:

  • Fast and convenient.
  • Unsecured. Unlike secured loans, you don’t have to offer collateral, eliminating your risk of losing an asset.
  • Competitive. They tend to offer lower rates than other unsecured loan options or credit cards.
  • Flexible. You can use them for any purpose, typically without restrictions.

Considering the quick application and approval process, signature loans can be a perfect solution for sudden emergencies like car or home repairs or medical bills.

Types of signature loans

Although loan availability varies by state, Advance America specializes in three types of signature loans that do not require collateral: Payday Loans, Lines of Credit, and Installment Loans.

Instead of basing our decision on your credit history, we look at your employment status, proof of income, and current debts to determine your ability to repay.

How to get a signature loan

If you like the sound of a signature loan, here's how to find the perfect one for your needs.

1. Research and compare loan options

When choosing a signature loan, it's important to do your homework. There are many different lenders offering various types of signature loans, so you’ll want to check the repayment terms, interest rates, and whether or not they have additional fees.

2. Check your credit score

It’s always a good idea to check your credit score before applying for any type of financing. Since most traditional lenders require a good credit score, you may not qualify for a bank loan on your own. If that’s the case, you may need to enlist a co-signer or choose a lender like Advance America.

3. Fill out the application

Once you find the right signature loan from a reputable lender, it’s time to apply. At Advance America, you can apply online or in-store at your nearest location. Either way, you'll need the following:

  • Your government-issued ID
  • Proof of income, such as pay stubs or bank statements
  • An active checking account
  • Social Security number
  • A working email address (if you're applying online)

4. Wait for approval

Once you complete and submit the loan application, you'll need to wait for approval. Approval time will vary from lender to lender. At Advance America, we can let you know if you're approved within minutes!

5. Receive your funds

Once approved, you should receive your money quickly. For instance, if you’re approved for an Advance America loan before 10:30 AM EST, you’ll receive the funds on the same day. For loan applications approved after 10:30 AM EST, you can expect a deposit on the next business day.

6. Review your repayment plan

Finally, it's crucial to understand and prepare for your loan repayment plan. This will include creating a budget and setting aside enough money to make your loan payments. The repayment period for most signature loans can be from several months to several years. Signature Payday Loans have a shorter repayment window of just two to four weeks, so you'll need to plan accordingly.

About the Author

Jalin Coblentz has contributed to Advance America since 2023. His experiences as a parent, full-time traveler, and skilled tradesman give him fresh insight into every personal finance topic he explores.

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Since 1997, Advance America has helped millions of hardworking people with a variety of financial solutions including Payday Loans, Online Loans, Installment Loans, Title Loans and Personal Lines of Credit.
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