Weekly Installment Loan
In the most basic sense, short-term loans are unsecured loans that have a repayment period of 1-3 years. However, not all of these can be considered as payday loans. Payday loans are simply one of the many kinds of loans. Some examples include the likes of debt consolidation loans, personal loan, installment loans, and business loans.
|Loan Amount||Up to $5000|
|Min. Credit Score||None|
|Loan Terms||Short Term & Long Term|
Why Loans Installment Loans Are Better?
The greatest advantage of these types of loans is you can repay it inflexible and cheap payment for the whole period of the loan while enjoying the freedom to repay the loan in a single payment without any advance repayment charges.
Bigger loans with smaller rates
Another advantage of online loans is the loan amount that you are allowed to take out. Lenders will allow you to borrow a minimum of $500 with one month of the repayment period or a maximum of $2,500 with 12 months repayment period. Just be sure to make the monthly payments diligently and you’re all set.
Adjustable repayment options
An extra advantage you can enjoy is the option to repay the loan in over one year, allowing you to pay in smaller and more manageable installments. You can also repay the loan via an automatic repayment system to make it even more convenient since you don’t have to worry about late or missed payments. Some people use their credit cards to make auto debit arrangements for payments.
What is An Installment Loan?
If you want to know more about lending, then you’ve probably encountered the word installment loan at some point in your life. This is the most common choice among cash-strapped individuals and those looking for loans with bad credit. But before you can apply for this loan, do you know what it is? If you want to use it appropriately to address your financial needs, you need to learn about its basics, as well as its difference and similarities with payday loan installment loans. You should know how to avoid being trapped in the endless debt cycle between payday and installment loans. Also, knowing the different kinds of installment loans will let you choose which payments or payment scheme is the most suitable for you.
Installment loans are exactly what its name says. It is any credit that is provided to a borrower in settled amounts and it is expected to be repaid in the same amount. The lump sum payments is equal to the principal, interest rate, and other fees charged by the lender. The terms and conditions suggest that the borrower pays via installments each month, although there are lenders that allow regular installments.
Common examples of installment loans are mortgages, non-secured credits, college loans, and auto loans. But, there are several credits that lending companies call as installment credits. They are installment borrowings that work just like a payday loan. Typically, installment loans are offered at a fixed amount and their repayment duration is normally longer than payday installment loans. However, the loan amount is much lower than regular unsecured credits. Lastly, the interest rates that are associated with installment loans are extremely higher than those linked to unsecured credits, loans for bad credit, or personal lendings.
Kinds of Installment Loans
Below are the most popular kinds of installment loans:
1. Auto loans
These are the kind of installment loans that are typically expected to be paid back for 1-8 years. However, some lenders don’t offer loans within this range. If you are paying auto loans for longer years, your installments will be much smaller, however, the rates will catapult. This means that if you choose the longest repayment period, you will end up repaying more for the vehicle that you will loan. Basically, the shorter the loan period and the higher the repayment, the lesser interest you will pay. A Customer who pays in lump sum are bound to get a better deal.
Another kind of installment loan is mortgages. Mortgages work in a very simple way. You take it from a bank and they will give you the money that you need to purchase your home or they will provide you the home that will serve as collateral. Generally, mortgages are considered as long term installment loans. They are repayable for more than 15-30 years, alongside monthly payments.
3. Personal Loans
An unsecured loan or popularly known as a personal loan is an installment loan that is used for a different purpose. It can be utilized as payment for unforeseen financial expenses or debt consolidation. Personal loan gas a repayment term of one up to eight years. Given the fact that they are installment loans for bad credit, they are notorious for having high-interest rates compared to other installment loans. Moreover, borrowers with weak credit scores might consider this as a viable loan option since it doesn’t perform a credit check. The credit score is only significant when determining the interest rate for personal loans or loans for bad credit but it won’t affect the borrower’s chance of approval.
4. Student Loans
When you apply for student loans, you can obtain the money that you need even if you are still in school. The repayment period will start six months after graduation, or depending on the lender. There are many kinds of student loans. You’ll find some with flexible rates and others offer fixed rates. If you fail to repay a student loan, the rate will accumulate and increase.
Why Do Borrowers Choose Installment Loans?
Many borrowers prefer online installment loans since they offer a lot of advantages. Here are several striking features:
Hassle-Free Application Process
Whenever you need fast cash, all you need to do is go to your computer and apply for an installment loan. The procedure is sweat-free and it only takes a few minutes to complete.
Once you submit your application form, you can see the standing of your loan right away. If the application is approved, you can accept the loan and withdraw the money in your bank account after 24 hours or the next business day.
Less Strict Application Requirements
An installment loan, your application can be approved even if you have an unfavorable credit rating. This is because their loan evaluations are more forgiving and less strict. They don’t demand hard credit checks on your credit history. You just need to show that you can pay back the loan.
The amount of loan you are planning to borrow, the lender you choose, and the state that you live in, are the factors that will determine the interest rate of your installment loan.
Loan Terms and Conditions
The T&C of the installment loan will depend on the credit provider and local federal laws in your state.
Requirements for Installment Loan
These are universal requirements that you need to meet to apply for installment loans:
- Proof of employment – you don’t need to show that you have eight jobs or big business to meet this requirement. All you have to provide is proof of income like a part-time job or even welfare.
- Active and working bank account – or you can get the approved money from any branch in your state if you don’t have a bank account.
- Physical address – you have to be a resident of the country that you are planning to secure a loan.
- Federal-issued ID – lenders will ask you to present a federal-issued ID to confirm your age. The required age to qualify for a loan application is at least 18 years old.
How to secure the best installment loan
Determine your purpose for applying
Are you looking for a fast cash flow that you can use for your emergency medical bills, car repair, home renovation, or debt consolidation payment? Then the installment loan will work best for you. Just make sure that you are aware of the interest rates and other requirements that come with this loan type.
Consider using a credit card
If you’re still unable to find a decent lender that will offer you an installment loan, think about your credit card. Sometimes, this can be a better financing option. A credit card might accumulate a generous amount of interest rates than unsecured loans, but it doesn’t hold compared to online installment loans. Your credit card might be a cost-efficient option, as long as you haven’t used up your credit limit yet.
Examine the interest rate and APR
The APR of your loan gives a clearer view of the real cost of your loan. It is made of the interest and fees.
Pay attention to personal loans
As mentioned earlier, some lenders use unsecured loans as a way to prey on borrowers with a tight financial situation.
Shop and compare lenders
There are a lot of lenders out there and this gives you the right to look around and compare. Select the best one that offers decent and beneficial terms.
Don’t fall for long-term guarantees
Once a lender opens his mouth and tells you that he provides a loan with a long-term repayment period, hit him with questions about the interest rates. These kinds of loans often come with supreme interest rates, so you end up paying more for the same loan amount that you could’ve repaid for a shorter time. Though the small monthly repayment sounds great, it’s not good for your finances.
Make sure you spend some time to think about your decision on whether you should take out installment loans. Every type of loan has pros and cons that you should consider to save yourself from future financial stress. You can also look around for the best loan for your present financial needs.