Installment loans for Bad Credit: A More Flexible Solution
Installment loans for bad credit allow people with a poor credit record to repay a borrowed amount of money in several payments over a set period of time. Installment loans are basically the opposite of revolving credit (like credit cards) since payments don’t change. The number of payments is determined by the loan contract. This loan contract must follow the Truth in Lending Act regulations, which aims to protect consumers from unfair lending practices.
Installment Loan Advantages
If you are trying to decide whether to take an installment loan for bad credit, consider the advantages offered by online lenders over traditional financial institutions like local banks. While banks might be able to provide you with more funds, online lending websites have fewer requirements and faster approval processes to assist borrowers in emergencies at affordable costs. There are several other advantages of installment loans over other forms of credit.
1. Monthly payments. Payments are usually determined by interest charges, loan balance, and the payoff term of the loan. Auto loans and mortgages are common examples of installment loans used for high priced purchases.
2. Steady and simple. Installment loans for bad credit have fixed and steady monthly payments as opposed to other forms of credit like credit cards. With credit cards, payments can changed based on the balance amount, interest charged, and the percentage used to lower the principal amount, or amortization.
If you would like to repay an installment loan quicker than originally planned, check the lender’s terms to know if early payment fees apply.
3. Improve credit history. If you manage your loan effectively, you’ll have more funds available and it’ll be easier to avoid late payment fees in other types of accounts that report to the credit bureaus. As with any other form of credit, use the money wisely to avoid falling into a constant cycle of borrowing.
4. Access to needed funds. Installment loans for bad credit provide needed funds in times of financial need, whether you need to pay utility bills, medical costs, house repairs, or cover other expenses. Since installment loans don’t have to be paid back with your next paycheck, you simply get more time to handle your finances.
5. Available online. With an installment loan from an online lending website, you may get a loan approved within minutes after submitting an application if all requirements are met. As such, you can save a lot of time with an online lender in comparison to a local financial institution.
Online lenders provide installment loans for bad credit to borrowers that meet a few basic requirements.
1. State eligibility. Not all states allow online lenders. Check lenders’ websites for loan availability in your state.
2. Adult age. Borrowers must be at least 18 years old.
3. Legal residency. Consumers must be permanent residents or U.S. citizens.
4. Steady income. A steady source of income is required to apply for an installment loan as proof that the loan can be repaid.
5. Active checking account. After an installment loan is approved, funds are usually deposited into the borrower’s checking account.
Online Lender – Features to Consider
Before getting an installment loan from an online lender, check the following features:
- Funds delivery process. You should know how the borrowed funds would be delivered to you before signing an installment loan contract. These borrowed funds shouldn’t take more than three business days to be deposited into your bank account, but the deposit times may vary based on the lender.
- Repayment options. Online lenders may provide different options for you to pay off an installment loan. Check how flexible an installment loan is based on minimum and partial payment options.
- Secure website information. Always check an online lending website’s security and privacy information to make sure that your personal details are kept away from prying eyes. Online lenders must be licensed by the respective state where services are offered and under the FTC (Federal Trade Commission) policies.
How do online installment loans for bad credit work?
Many online lending websites have simple and effective installment loan processes, which can be summarized in seven basic steps.
1. Submit an online loan application. Applications only require some basic personal information, and normally take only a few minutes to complete.
2. Instant consideration. All applications are instantly considered after submission. Depending on the online lender used, you might be approved within minutes.
3. Receive and review your credit limits. This is the highest amount available for your based on your personal records and lender loan limits.
4. Check the loan contract. Read and understand all terms and conditions.
5. Agree to the loan contract. You should only agree to a loan contract after all terms are thoroughly understood.
6. Fast deposits. Deposits may be processed within one-business day. After funds are transferred into your account, withdraw your money up to the approved amount.
7. Follow repayment terms. Pay off your installment loan as scheduled to avoid default payments or collection notices.
Before signing any loan contract, make sure to check all terms, conditions, payment schedules and amounts. If you need funds in a hurry, an online installment loan for bad credit may provide you with needed funds in a fast and simple way at affordable rates.