What is the difference between a personal loan and a signature loan?

Origin of the term: 'Signature loan' was commonly used by banks and savings institutions in the mid-20th century to describe small unsecured personal loans approved based on the borrower's character and creditworthiness alone. The lender received nothing but a signed promissory note - hence 'signature loan.'

Modern usage: Today, most lenders use the term 'personal loan' or 'unsecured personal loan.' Some credit unions still use 'signature loan' in their product names. The products are functionally identical.

Distinctive characteristics of both names: No collateral required. Approval based on credit score, income, and DTI. Fixed or variable interest rate. Set repayment schedule (typically 12-84 months). Funds deposited directly to bank account. Full borrower obligation - defaulting leads to collections or lawsuit, but no asset is automatically seized.

When you hear 'signature loan' at a credit union: Credit unions often use legacy product naming. Their 'signature loans' are simply unsecured personal loans. They may offer slightly lower rates than online lenders (3%-18% APR range for members in good standing) because credit unions are member-owned nonprofits without profit motive.

Distinction from secured personal loan: A secured personal loan requires collateral - a savings account, CD, or other asset that the lender can seize if you default. Secured loans offer lower rates but require you to pledge an asset. Both 'signature loans' and 'personal loans' are unsecured unless specifically labeled 'secured.'