Signature Loans: How They Work and What To Know

Get up to $50,000 as soon as the same day with just your signature

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Best signature loans in 2025

Discover: Best for no upfront fees and excellent customer service

7.99% - 24.99%

$2,500 - $40,000

36 to 84 months

No origination fee

720

Pros
  • Doesn’t charge upfront fees
  • 97% satisfaction rate among LendingTree users
  • Competitive interest rates
  • Get money in as little as one business day
Cons
  • Requires good or excellent credit
  • Charges $39 late fee (high for a personal loan)

What to know

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While it’s common for lenders to charge upfront fees called origination fees, Discover’s signature loans come without upfront charges of any kind. You can pay off a Discover loan early without coughing up a prepayment penalty, and the interest rates are competitive enough to keep Discover on our list of the best signature loan lenders.

Although Discover is a bank, you can apply for its signature loans online. You’ll need good or excellent credit to qualify for a Discover loan, and we recommend keeping up with your loan payments — missing a payment will result in a $39 late fee.

How to qualify

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You’ll need to meet these eligibility criteria to get a Discover loan:

  • Age: Be at least 18
  • Citizenship: Have a Social Security number
  • Administrative: Have a physical address, an email address and internet access
  • Income: Minimum income of $40,000 (individually or as a household)
  • Credit score: 720+

LendingPoint: Best for fair credit

7.99% - 35.99%

$1,000 - $36,500

24 to 72 months

Up to 10.00%

660

Pros
  • Available to borrowers with fair credit
  • Low starting rates for borrowers with excellent credit
  • Get money in as little as one business day
Cons
  • Charges fees
  • Can only borrow up to $36,500 (some lenders offer up to $100,000)
  • Not available in all states
  • One of the highest maximum interest rates on our list

What to know

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LendingPoint offers loans with decent rates to borrowers with fair credit who might otherwise have a hard time qualifying for rates below 36%. Its maximum interest rate is on the high end for our list, but it’s below the 36% threshold that many personal finance experts agree is affordable.

Unlike competitors like Discover, LendingPoint does charge upfront origination fees. And you’ll need to look elsewhere for a large loan, since LendingPoint only lets you borrow up to $36,500.

How to qualify

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To get a signature loan from LendingPoint, you must meet its minimum criteria:

  • Age: Be 18 years old or older
  • Administrative: Provide identification issued by the U.S. government, have a Social Security number and have a bank account
  • Income: Have a minimum income of $35,000
  • Residency: Not live in Nevada or West Virginia
  • Credit score: 660+

PenFed Credit Union: Best for small loans and no upfront fees

8.99% - 17.99%

$600 - $50,000

12 to 60 months

None

Not specified

Pros
  • Competitive interest rates and no upfront fees
  • Take out as little as $600
  • Offers both long- and short-term loans
Cons
  • Doesn’t specify credit requirements
  • Must become member to take out loan
  • Charges $29 late fee (high for a personal loan)

What to know

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With PenFed, you can take out a loan as small as $600 to cover a bill or everyday expense, making PenFed a much more affordable alternative to payday lenders that charge predatory rates.

Know that you’ll need to become a PenFed member in order to close on your loan — don’t worry, it’s easy to qualify — and you’ll be on the hook for late fees if you miss a due date.

How to qualify

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To qualify for a PenFed loan, you must meet the following requirements:

  • Membership requirements: PenFed membership (anyone can join)
  • Administrative: Open a PenFed savings account with $5 deposit; may need to submit documents to verify your identity and income

SoFi: Best for big loans and no required fees

8.99% - 29.99% (with discounts)

Pricing Disclosure

Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

$5,000 - $100,000

24 to 84 months

0.00% - 7.00% (optional)

680

Pros
  • Borrow up to $100,000, the highest loan amount on our list
  • Optional fees
  • Offers same-day funding
Cons
  • May need to pay one-time fee for lowest rates
  • Requires good to excellent credit to qualify
  • Must borrow at least $5,000 (other lenders start at $2,500 or below)

What to know

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While most personal loan lenders only offer up to $50,000, you can take out as much as $100,000 with SoFi with just your signature. SoFi’s fast funding timeline and optional fees secured its place on our list of signature loan lenders.

If you’re looking for a small signature loan, choose another lender on this list — you can’t take out a SoFi loan less than $5,000. Also note that you may need to pay an upfront origination fee in order to qualify for SoFi’s lowest rates.

How to qualify

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You must meet the requirements below to get a loan from SoFi:

  • Age: Be the age of majority in your state (typically 18)
  • Citizenship: Be a U.S. citizen, an eligible permanent resident or a non-permanent resident (a DACA recipient or asylum-seeker, for instance)
  • Employment: Have a job or job offer with a start date within 90 days, or have regular income from another source
  • Credit score: 680

Upgrade: Best for getting a bank account and a loan

9.99% - 35.99% (with discounts)

$1,000 - $50,000

24 to 84 months

1.85% - 9.99%

580

Pros
  • Can sign up for a bank account during the loan application proess
  • Qualify with fair or bad credit
  • Interest rate discounts for autopay and paying off debt directly
Cons
  • Charges fees
  • One of the highest maximum interest rates on our list

What to know

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Upgrade offers a unique perk for borrowers who want both a new bank account and a loan: You can easily create a checking account with Upgrade as part of your loan application process, and you can earn up to $200 for doing so if you meet certain requirements. Plus, you can snag interest rate discounts by signing up for autopay and paying off your debt directly.

That said, Upgrade will likely charge high interest rates to borrowers with fair or bad credit, and Upgrade charges a one-time administrative fee called an origination fee.

How to qualify

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To qualify for an Upgrade loan, you must meet the requirements below:

  • Age: Be at least 18 years old (19 in some states)
  • Citizenship: Be a U.S. citizen or permanent resident, or live in the U.S. with a valid visa
  • Administrative: Have a valid bank account and email address
  • Credit score: 580+

Upstart: Best for bad credit

7.40% - 35.99%

$1,000 - $50,000

36 or 60 months

0.00% - 12.00%

300

Pros
  • One of the lowest credit score minimums on the market
  • Low starting interest rates
  • Get money as soon as the next day
Cons
  • Only two loan repayment lengths to choose from
  • May charge fees
  • Bad-credit borrowers will likely get high interest rates

What to know

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Upstart’s unusually low credit score requirement makes it a must-consider for anyone looking for a bad-credit signature loan. But Upstart isn’t just for people with bad credit — borrowers with excellent scores may qualify for some of the lowest starting interest rates on the market.

Upstart only offers loan terms of 36 or 60 months, which may not work for all borrowers. Depending on your credit, Upstart may charge a one-time origination fee that you’ll need to factor into the cost of your loan.

How to qualify

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Upstart has transparent eligibility requirements, including:

  • Age: Be 18 or older
  • Administrative: Have a U.S. address, personal banking account, email address and Social Security number
  • Employment: Have a job or job offer that starts within six months, or have regular income
  • Credit-related factors: Debt-to-income ratio no higher than 50% (45% in Connecticut, Maryland, New York and Vermont), no bankruptcies within the last year, fewer than six inquiries on your credit report in the last six months and no current delinquencies
  • Credit score: 300+

What is a signature loan?

Signature loans are unsecured personal loans, meaning they aren’t backed by collateral. Signature loans rely on the promise of your word — or your signature — that you’ll pay back the loan in full.

You can use a signature loan for just about anything, including:

Signature loan rates

The better your credit, the less you’ll pay in interest on a signature loan. Here’s what rates you might expect to pay depending on your credit score:

Credit score rangeAverage APR
720+17.43%
680-71930.65%
660-67944.74%
640-65958.24%
620-63975.18%
580-619117.65%
560-579160.30%
Less than 560191.19%

Source: LendingTree user data on closed personal loans for the third quarter of 2024.

 Don’t know where you stand? You can check your score for free with LendingTree Spring.

Pros and cons of signature loans

While signature loans can help you pay for necessary expenses, you can land in hot water with high fees and interest rates if you’re not careful. Here’s what you need to know:

ProsCons
 No risk to assets. Lender can’t seize your possessions if you don’t make payments because signature loans don’t require collateral.

 Can boost credit score. Can help build your credit if your lender reports payments to the credit bureaus.

 Fast funding. You’ll receive loan money as soon as the same day, depending on the lender.
 Charges fees. Often come with upfront administrative charges called origination fees, which can be as high as 12.00%.

 Can damage credit. Late or missed payments can pull down your credit score.

 Potentially high rates. Borrowers with fair or bad credit will pay high interest rates, making signature loans an expensive way to borrow money.
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How do signature loans work?

Approval: Because signature loans don’t require collateral, lenders will use your credit score and history to decide whether to approve you for a loan.

Fixed payments: A signature loan is a lump sum of money that you pay back each month with a fixed annual percentage rate (APR). Your payment will be the same each month.

Set end date: Unlike credit cards, signature loans come with repayment terms, so you know exactly when you’ll be done paying off your debt. Signature loan terms can range from as short as 12 months (see short-term loans) to as long as 15 years (see long-term loans).

How to find a signature loan with LendingTree

  1. Fill out a quick form. You’ll answer a few simple questions about how much money you need, what you’ll use the loan for and when you need it.
  2. Review your offers. You’ll receive offers from up to five of our trusted lending partners with details like your approved loan amount, APR, repayment term and estimated monthly payment.
  3. Choose a lender. Once you officially close on your loan by signing the loan agreement, your lender will deposit your money into your account.

Expert insights on signature loans

Amanda PushAmanda Push, deputy editor and certified financial counselor

“Signature loans are generally best for those with good credit since lenders are basing their decisions on your credit score and history. They can be a good option if you want to consolidate debt or need some quick cash in an emergency. Watch out for high rates and fees as you could get stuck paying your lender hundreds or thousands of dollars in interest, costing you more in the long run.”

Can I get a signature loan with bad credit?

Yes, you can get a signature loan for bad credit, but you’ll have limited options. Because lenders rely heavily on your credit score, it’s more difficult to qualify for a signature loan with a bad credit score — and if you do get one, you’ll pay more in interest.

If you have bad credit, consider getting a signature loan with no credit check. These lenders don’t run a hard credit pull or base your eligibility on your credit score.

 Pro tip: If a friend or family member with excellent credit is willing to cosign your loan, you’ll have more options and potentially lower interest rates. Cosigner loans lessen your risk as a borrower in the eyes of lenders, since two people are taking responsibility.

Signature loan vs. personal loan

A signature loan is a type of personal loan. Personal loans come in two forms: secured and unsecured. Signature loans are unsecured, meaning they are backed by your signature rather than by physical collateral or possessions.

Secured loans are backed by collateral, which is a valuable asset or piece of property you own. The type of collateral you can use depends on the lender, but common forms include savings accounts, vehicles or real estate.

 What happens if you don’t pay? If you miss payments on a secured loan, the lender can take your collateral, while defaulting on an unsecured loan will tank your credit.

Where to get a signature loan

Depending on your preference, you can apply for a loan online or in person. Here are some of the most common places to find a signature loan:

Where to get a signature loan Banks: While banks like SoFi and Discover typically offer competitive APRs, terms, loan amounts and perks, they tend to have stricter eligibility requirements. To get a signature loan from a bank, you’ll likely need a good credit score and a positive credit history.

Where to get a signature loan Credit unions: Because federal credit unions like Navy Federal cap their APRs at 18.00%, credit union personal loans tend to be affordable. Like banks, however, you’ll likely need solid credit to qualify. Credit unions also typically require that you become a member before you can access a loan.

Where to get a signature loan Online lenders: Online signature loans from lenders like Prosper and Achieve tend to come with lower credit requirements than loans from banks and credit unions. However, you may pay more interest with an online lender.

Frequently asked questions

Since lenders use your credit to decide if it’s safe to lend you money, you’ll need a good credit score to get a signature loan from many lenders. A good FICO Score is at least 670, while a good VantageScore is 661 or higher.

Because signature loans are a type of personal loan, they can be used for just about any purpose as long as it fits the lender’s policies.
 
Common loan uses include debt consolidation, unexpected expenses, medical bills, home improvement projects, credit card refinancing, weddings and travel.

If you have good credit and room in your budget to afford a monthly payment, you may decide that the risks of taking out a personal loan are worth it. But if you have poor credit or can’t afford the monthly payments, think twice before taking out a signature loan.

Signature loans can improve your credit as long as your lender reports your payments to the credit bureaus. Credit bureaus will record payments on your credit reports, which are used to calculate your credit score.
 
Before signing for your loan, make sure your lender reports to at least one of the three major credit bureaus.

How we chose the best signature loans

We reviewed and rated more than 30 lenders on 19 individual criteria to handpick these lenders. Here’s what we considered:

  • Rates and terms: We prioritize lenders that offer competitive interest rates and discounts. Lenders that offer a wide range of loan amounts and repayment terms receive high marks.
  • Accessibility: Lenders receive points for making loans available to a wide range of people. We also award points based on the ease of the application and loan disbursement process.
  • Repayment experience: We look at reviews and trusted third-party sources like the Consumer Financial Protection Bureau and Trustpilot to evaluate each lender’s reputation and the customer experience.

According to our systematic rating and review process, the best signature loans come from Discover, LendingPoint, PenFed Credit Union, SoFi, Upgrade and Upstart. We review and fact check our selections regularly to make sure that we’re giving you accurate, solid advice for your next money move.