The rate of interest charged on a loan is directly related to the perceived risk involved in its approval. Those with a good credit score and impressive monthly income should be able to negotiate good rates in what is a fairly low interest rate environment. Where an applicant’s status is less impressive then interest rates will rise. Secured loans always minimize the risks for lenders who have had their difficult times in recent years. Loans granted purely on a signature on the agreement may not be cheap but, with the economy improving, at least money is available
Borrowing money is nothing new in the USA, indeed many other parts of the world as well. The real estate market could not exist in its current form without mortgages. However it is quick cash loans for lesser amounts and over a shorter term that come under more scrutiny. Taking out a loan for something, even just ordinary living that is not financially prudent is harmful. There are still households recovering from the remaining effects of the recession. Those wishing to borrow money have to make out a case for approval. The fall in unemployment figures certainly reflects an improving economy and hence optimism in consumers has increased.
In places like Oklahoma City (OKC) where the economy has been transformed over a couple of decades why shouldn’t people be optimistic and borrow money? The City has recovered from the effects of the oil bust in the 1980s when other business closures painted a gloomy picture of the City’s future prospects. Even with a recession in between Oklahoma City is a different place today with unemployment comfortably below the national average. There has been infrastructure investment in a center that years ago was failing fast. Jobs have been created with the investment and businesses have been more than happy to relocate into the region.
In these circumstances it is natural to ‘’sign in’’ to the developments. Where that involves signature loans in OKC applicants for such loans are likely to receive a sympathetic hearing, especially from online lenders who are likely to put far more weight on whether applicants have the means to pay off the loan in full rather than on their current credit score.
No Security Required
The point about signature loans is that applicants are not offering any form of security and hence there is heightened risk of default than where collateral is provided. That risk factor may result in an approval at a slightly higher interest rate than the norm but that is all.
These loans may be very short term, often called payday loans, or they may be installment loans over a specified period.
- Payday loans are designed to solve an emergency when someone has run out of money and the next pay check is a little way away. They are repaid when the pay check comes in. It is expensive to fail to meet that due date. On occasions payday loans can be for a slightly longer period but there is a cost.
- Installment loans have a much lower interest rate but not as low as where security is offered. The payments should ideally be put into the expenditure column in a monthly budget. It makes very sound financial sense to run a proper financial budget as part of keeping money affairs in good order.
Online lenders require basic information to consider any application for money. Applicants need to identify themselves and provide employment and bank details. The whole process can be done online and decisions will be virtually immediate. Indeed the process of transferring the money follows shortly afterwards so it will be never more than a business day to receive the money into the bank.
Metropolitan areas such as Oklahoma City where employment is readily available have strong financial sectors but it is the new breed of online lender that is growing throughout the USA because of its approach to applications. While credit scores are still important and everyone should strive to improve theirs, it is only really in the mortgage sector where they may be decisive in approval or rejection. Signature loans from online lenders are there for realistic applications from people with regular income.