Signature Loans with No Credit Check: Pros, Cons & Alternatives

Chang Fu
Jan 03, 2020

A signature loan — also known as a good faith or character loan — is an unsecured loan that uses only the borrower’s signature and promise to pay to lend money. That’s where the name “signature loan” comes from — a borrower using only their signature to get a loan. Many personal loans can be considered signature loans.

A signature loan without a credit check is rare. Be careful of misleading content and advertising across the internet about signature loans with no credit check. Because signature loans are unsecured and do not involve collateral (unlike a car mortgage, house mortgage, or title loan), it’s extremely unlikely a lender will lend significant amounts of money without doing some type of credit check. More likely, a signature loan without a hard or soft credit check is structured as a payday loan, cash advance, short-term loan, or other type of no credit check loan.

A signature loan with no hard credit check includes an installment loan from Possible. You can apply, get approved, and take out a loan up to $500 in minutes… and Possible doesn’t check your FICO credit score. Repay the loan over time and build credit history, similar to personal loans and other lower APR loans.

So, let’s dive deeper on the difference between a signature loan, payday loan, and title loan?

Signature loan vs Payday loan vs Title loan

Signature loan. A signature loan is another name for an unsecured personal loan or non-collateral loan. If a loan is unsecured, it means no collateral (asset lender accepts as security for a loan) is attached to the loan. If you cannot repay your loan back, the lender has no collateral to collect or seize. This is different from a home mortgage, as an example; if you fail to pay your mortgage, the lender may foreclose on your home. A signature loan will usually require a credit report because the lender must determine whether they will lend to you and how much. Loan amounts can range on signature loans but are generally a few thousand to ten thousand dollars. APRs are usually 5 to 36% and terms can range from a few months to several years. Similar to offline and online installment loans, signature loans are usually repaid in portions throughout the term of the loan.

Payday loan. A traditional payday loan is an unsecured loan usually repaid within a few weeks. A payday loan usually has an annual percentage rate of interest (APR) of 400% or more and is repaid in a few weeks, usually on the borrower’s next payday. Payday loans can be considered a type of signature loan but is meant to be used for more of an emergency expense or last-resort option. Some payday loan lenders, especially the online lenders, run credit checks but others do not. In either case, bad credit or less-than-perfect credit is usually OK and you don’t need a great FICO score to apply. You’ll need to bring your proof of income, a state-issued ID, and a post-dated check or information on your checking account when you’re applying for your payday loan.

Title loan. A title loan is a secured loan that uses your car as collateral for the loan. APRs tend to be over 100% and the term of the loan is usually short. Be careful — if you fail to repay your title loan, you can lose your car! Title loans are usually used as a last resort and is considered expensive compared to signature loans and other forms of borrowing.

Terms for a Signature Loan

  • Interest Rate: The interest rate on your signature loan will drive how much you pay in interest costs. You’ll need to understand how the interest rate converts into an annual percentage rate (APR) on your loan. There are usury laws in many states and as for some states ban signature loans or unsecured loans over a certain APR. For example, New York prohibits payday lending through criminal usury statutes, limiting loans to 25 and 30 percent interest respectively.
  • Term: The term is the length of the loan. It can vary from a few months to multiple years. Some unsecured loans can even have a term of 5 years! How long the loan is outstanding has a direct relation to how much risk the lender is willing to take – the longer the term of the loan, the higher the risk for the lender.
  • Origination fee: Some lenders will charge a fee for originating the loan. Usually a one-time fee, the origination fee adds to the overall cost of your loan. This fee, in many cases, is deducted from the loan amount you borrow so the actual amount you receive from your signature loan can be lower than the amount you were approved for and lent out to you.
  • Early payoff fee or prepayment fee: Some lenders may charge a fee for paying your loan off early. This is called an early payoff fee or prepayment fee. In some states, an early payoff fee is illegal. This fee adds to the overall cost of the loan and if you plan on paying your loan off faster than the agreed upon term schedule, look for a signature loan without an early payoff fee. Paying off the loan early may still be the right situation for you because you can save interest by paying off a loan early despite an early payoff fee.
  • Late payment fee: A late payment fee can be avoided by paying your principal and interest on your signature loan on time. Your credit score can also be hurt if you do not pay on time because the lender will report late monthly payments to the credit reporting agencies and bureaus. If you make a mistake and forget to pay, some lenders may allow for a grace period and waive your late payment fee if you ask.

Friendlier than a signature loan

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Application process for a signature loan with no credit check

Many signature loans and unsecured personal loans can be applied for online or at your potential lender, whether that’s a bank, credit union, or other financial institution. You’ll likely need the following:

  • Personal information
  • State-issued ID
  • Proof of income or credit reports
  • Social security number

Most lenders will run some sort of credit check to help determine whether to lend you money and how much money to lend. Other lenders like some payday loan lenders and Possible Finance won’t check your FICO credit score and will use bank account information or other data available to make the lending decision.

Online or mobile applications can take just a few minutes. After the loan application is submitted, a few lenders may get back to you instantly, but most will probably take a few days.

What can you use a signature loan with no credit check for?

The borrower has the choice to use the funds from a signature loan for a variety of different things, including:

  • Emergency expenses
  • Debt consolidation
  • Home improvements
  • Major purchases
  • Ongoing expenses

Usually, there is no restriction on how the funds are utilized.

Will the lender check your credit score?

Most lenders and financial institutions will check your credit score or run a credit check when you apply for a signature loan or personal loan. Some lenders will have a minimum FICO score of 650 or 700 for these loans. Payday loan lenders may not have a FICO score requirement and may not run a credit check at all.

Lenders can conduct a hard inquiry or soft inquiry on your credit. A hard inquiry may affect your credit score and is usually performed just prior to giving the borrower a loan. A soft inquiry does not affect your credit score but will show up on your credit reports.

If you are looking to rebuild credit or improve your credit score to qualify for a signature loan, you should look into a credit builder loan first. However, it may take many months before your credit significantly improves and building credit history is not a guarantee your score will improve.

Types of signature loan with no credit check and Alternatives

  1. Possible loan – Possible has a mobile-only installment loan that allows you to borrow up to $500 depending on state, get the money in as fast as a few minutes, and build credit history. In addition, if you have trouble repaying a payment, you can reschedule the payment directly in the Possible mobile app on the iTunes App Store or Google Play Store.
  2. Payday loan – With a payday loan, you can borrow money up to $1,000 with just a paystub (proof of income), post-dated check, and a state-issued ID. You can apply for payday loans online or at a lender with a storefront. Be sure to compare APRs, repayment terms, and fees between various payday lenders. Payday loans have higher interest rates than most signature loans.
  3. Payday alternative loan (PAL) – Credit unions may offer payday alternative loans which are similar to payday loans except the annual percentage rate of interest (APR) is much lower. To qualify for a PAL, you’ll need to have an account with the credit union and there may be other requirements.
  4. Personal line of credit – A personal line of credit allows you to take money as you need it but up to a certain limit. You won’t need to decide the amount of money you need to borrow upfront. Some people call it a “personal loan that works like a credit card.” However, personal lines of credit may require a credit check or credit inquiry and a minimum credit score to qualify so those with bad credit may not get approved.
  5. Peer to peer lending platform – You can borrow money from everyday investors and individuals through a peer to peer lending platform like Lending Club or Upstart. Each peer to peer lending platform may have its own qualifications to apply and get a loan. Peer to peer (P2P) loans often have fixed rates and monthly payment schedules so the structure may be inflexible.
  6. Payday advance app – A payday advance app like Earnin, Dave, or Brigit allow you to advance a certain amount of money from your paycheck early. These apps will often track your location and charge a subscription fee or tip for the services. If you need some money quickly and a simple payday advance before your payday can cover your needs temporary, these apps may be the right option for you. They can solve a short-term financial need.
  7. Help from family and friends – Not the best option for everyone, but getting help from family and friends may be the cheapest and most viable option for you. Be sure to write an agreement and sign it so you don’t have family disputes crop up.
  8. Credit card – You can qualify for some credit cards even with a bad credit score. There are credit card companies that allow for 650 credit scores or even below. Be sure to read the terms and conditions, the APR, and any other terms of the credit card. Compared to a payday loan or higher APR products, a credit card will tend to have a cheaper APR.
  9. Cash advance, check advance, and other short-term loans – These names actually all refer to payday loans and short-term loan products like payday loans. The APRs tend to be higher than other options but lenders are less restrictive on your credit and can usually fund money in one business day (ie. same day loans) or even as fast as a few minutes.

Benefits and Risks of a Signature Loan with No Credit Check


  • A signature loan or personal loan has APRs that vary from 5% to 36% and in comparison to payday loans and other short-term loans, the interest is much lower.
  • If there is no credit check, especially for those with bad credit or no credit, that’s great! However, most signature loans will run some type of credit check and have minimum credit scores.
  • You’ll have multiple periods to repay. Loan terms for signature loans can range from several months to several years.
  • Most direct lenders will report credit history to the credit reporting agencies like Experian, TransUnion, and Equifax. For example, if you have a loan from Possible Finance, as you repay the loan in installments, Possible will report your payments to two credit bureaus. And you don’t need good credit to qualify.


  • Funding can usually take several business days. Rarely will you be able to receive funds from a signature loan the same day you fill out your loan request, apply and get approved.
  • If you fail to pay, your credit score and credit history may be impacted. The lender will report failed payments to the credit bureaus and it could impact your long-term financial health.
  • There can be additional fees and charges related to getting a signature loan such as an origination fee.
  • Most signature loans have a minimum credit score or some type of credit check. It may happen with a certain term length or loan amount.

Chang Fu

Chang is an avid writer, among other things, at Possible. He grew up loving reading and writing, creating his own poems and even a book he's now hidden in an old closet, unpublished. His financial experience at a large bank along with his passion for technology to help underserved communities inspires him to write for Possible.

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