Have you ever experienced a situation where you were supposed to cover sudden expenses? Consider an installment loan! If your credit score is poor, an installment loan could be the best solution, if compared to a payday loan.
What are installment loans for bad credit?
Bad credit installment loans are proper for people who need fast cash but cannot afford to repay it in one lump-sum and may have sub-prime credit. They come with a fixed interest rate and are repaid in a series of monthly or bi-weekly payments. Each payment includes the loan principal and interest rate.
How can I use installment loans?
Similarly to payday loans, online installment loans are perfect for urgent situations or times when the paycheck is not enough. Usually, these are:
- Health related problems and medical bills.
- Cost of car repairs.
- Emergency home improvements.
- Debt consolidation.
- Covering sudden travel expenses or even planning.
Why choose installment loans for bad credit?
There are diverse reasons why people in need of money choose an installment loan:
- May increase credit score. They may help improve a poor credit score. The FICO score examines certain criteria, including timely repayment of loans and type of loans. Different types of debt, increase the credit rating, as it shows that the borrower knows which loan is the best for diverse life situations.
- Several payments instead of one. Borrowers can get the amount of cash they need even if their income doesn’t allow them to repay it in one single payment.
- Flexible repayment terms. Bad credit installment loans usually involve a maximum term of several months. Thus, the borrower avoids a long term commitment and can be debt free shortly.
- Any credit score is OK. Lenders giving such loans usually don’t pay great attention to credit score, so people have higher chance of being approved.
Advantages and disadvantages of online installment loans
With these loans, you get to enjoy the following benefits. However, it is important to be aware of certain drawbacks listed below.
Advantages of installment loans:
- Fast and easy application online.
- No traditional credit check that doesn’t affect the credit score.
- More time for repaying the loan (up to 24 months).
- Flexibility in loan repayment – bi-weekly or monthly plan.
- Cheaper than payday loans.
- Higher amounts of money you can borrow (up to $5,000).
- Fast transfer of money.
- High chance of loan approval even with bad credit.
Dangers of installment loans:
- High interest rates compared to personal loans or credit cards.
- Indebtedness for a longer period of time.
- Direct debit on borrower’s account.
- Traditional credit check can be performed by some lenders.
- Damage to credit score if not repaid promptly.
What’s the difference between payday loans and installment loans?
An installment loan is sometimes confused with a payday advance. Although there are some similarities between them, there are some big contrasts borrowers need to be aware of. Knowing the differences will help you choose the most suitable type of loan for your specific life situation:
- Maximum amount of borrowed money. In payday loans, the borrower can usually borrow up to $1,000. The borrowed amount of an installment loan can attain $5,000.
- Repayment period. Payday borrowers repay their loans in one amount, on their payday. An installment loan requires several payments, extending the repayment onto several installments.
- Interest Rate. With a payday loan, a fixed amount of interest rate is repaid on the due date. With an installment loan, the interest rate increases, as it adds every day until the loan is paid back.
How to qualify for online installment loans?
The most convenient way of getting a loan is applying online. No matter the preferred method of requesting a loan, you need to meet several eligibility criteria in order to get approved:
- Age of 18 years old or more.
- Have a bank account that can receive electronic transfers.
- Have a minimum monthly income of $1300.
- Be employed and be able to present a paycheck or letter on behalf of the employer.
- Not be active military.
What are the steps of getting installment loans?
- Complete our application form online. We will connect it with one of our multiple direct lenders.
- Wait for instant reply saying whether your application is approved.
- Adjust the loan offer so that it meets your possibilities of repaying it.
- Read loan contract once again and make sure everything is right.
- Sign loan agreement electronically.
- Receive the money in your bank account in maximum one business day.
Terms, fees, penalties, credit impact
The repayment term of installment loans is usually set before the funds reach the borrower’s bank account. Lenders are open to terms that vary between 14 and 24 months making long-term loans possible.
The interest fees increase daily based on the sum of money you have borrowed. If you choose to pay off your loan early, you will not have to pay the penalty with most lenders. Yet, check that up with your lender.
As for the credit impact, as long as you borrow responsibly and repay the loan on time, installment loans can help you improve your credit score.
Things to consider when applying for loans. Suggestions from our Team of Experts.
Installment loans can help you overcome tough financial issues. At the same time, they can worse your credit score if used reckless. Our financial experts at SameDayLoans365.org urge clients to borrow responsibly.
- Don’t exceed your needs.
- Establish that you truly need a loan.
- Consider how you will repay the loan.
- Spend the money solely on the pre-established goal.
- Carefully study loan offers and accept the most favorable one.