You must have heard about home loan, education loan, personal loan and gold loan. Many people you know might have taken a home loan or personal loan. One has to go through a lot of hassles to get a home or personal loan. If your credit score is good and you also have fixed income, then the bank easily approves the loan. For this, some documents and ID proof have to be submitted to the bank. But, this is not the case with Signature Loan. This is a different type of loan, which the bank gives to a person in exchange for his signature.
The special thing is that many people may not have even heard the name of the signature. Most people know only about home loan, personal loan and education loan. But, signature loans are also run by banks. To take a signature loan, a person just has to put his signature and the loan amount is transferred to his account. So let us know what is signature loan and what kind of people get this loan.
Its rate of interest remains low
Signature loan is also known as good faith loan or character loan. Or in simple language, this is also a type of personal loan. Banks issue this loan without any collateral. But its rate of interest is higher than home loan, personal loan or education loan. However, its rate of interest remains lower than the interest rate of credit cards.
When does the bank look for a guarantor?
The biggest feature of Signature Loan is that before giving this loan, banks check the credit history of the customer. When the bank is fully confident that the person taking the loan will easily repay the loan, then only it passes the loan. At the same time, many times the bank also takes the signature of a guarantor before giving signature loan. However, after giving the loan, the bank looks for the guarantor when the loan taker does not pay the EMI.
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