Installment loans are a type of loan that must be repaid in an installment basis over a certain period of time. The principal amount, plus interest, will be divided equally among the contracted number of months in a term. Unlike payday loans wherein the loaned amount is limited to about $1,500 only per transaction, installment loans offer more depending on your capacity to pay.
Why Get Installment Loans?
There are three main reasons why installment loans have become popular.
The first one is the fact that it has reliable interest rates therefore creating predictable monthly installments. Generally, the monthly installments are the same for the rest of the term so you can correctly appropriate your monthly budget. The idea of fixed interest rates is very appealing because you won’t have to worry about increasing interest rates and substantially increasing monthly installments.
Second, longer terms mean lower monthly payments. Because the interest rates are fixed, your monthly installments will be lowest if you can stretch them to the limit. Installment loans come with options and as long as you don’t mind paying monthly payments for years, then they shouldn’t pose any problem at all.
Third, installment loans can get approved in as little as two weeks, depending on how fast your lender processes your papers. The requirements vary per lender, though. But if you are in a hurry to get your installment loans approved, then you can take advantage of online lenders who do not run credit checks. You will get your installment loans in as fast as 24 hours from the time you submitted the required electronic form. You keep in mind though that lenders will look into your capacity to pay and how steady your current employment is.
How Do Lenders Benefit from Installment Loans?
Aside from the interest they charge, lenders also get security of payment from the materials they financed. Since installment loans are generally used to purchase expensive items like cars, houses and other properties, these same items can be repossessed if payments are not made as agreed.
Who Should You Approach to Obtain Installment Loans
Only apply for installment loans from companies with established reputations. The most common source of traditional loans is the nontraditional institution like the bank. However, the reach is limited due to the many requirements involved, particularly the credit score. But if you have bad credit, installment loans can still be an option via nontraditional firms like those you see online.
When applying for installment loans from online lenders, look for these three key features: security, interest rate and terms and conditions. Genuine reviews should help you in this regard. You can also seek help from firm who partner with only the best online lenders and who can pair you up with the best one for your category.
In addition, do not forget to check with your state to get the list of licensed and accredited loan lenders online. This should help you avoid high interest rates as accredited lenders follow the state laws when it comes to lending.