Are you thinking about purchasing a big-ticket commodity or service, but are worried about the lack of cash or a poor credit history? If you answered “yes,” then you probably know how limited your options are.
The good news is that installment loans are a convenient alternative for businesses and individuals who are looking to pay for homes, vehicles, buildings or even college tuitions in periodic and affordable installments. Besides, the installment loan framework itself assures the lender that the loan will be repaid.
Whether the borrower plans to purchase some installment loans online or from an actual storefront, interest obligations are designed to accrue periodically.
So what, exactly, is an installment loan? Well, installment loans are a less-risky personal financial solution, in contrast to, say, balloon loans that must be repaid in a lump sum, or even revolving credit; this is because any addition to the principal balance is not allowed. The borrower pays back an installment loan in equal monthly payments covering the initial debt as well as some accruing interest over a stipulated time interval. Hence, an installment loan is safe, unless the borrower for some reasons alter the repayment plan with the lender.
Auto loans, student loans, mortgage loans, personal installment loans can all be referred to as an installment loan — therefore one can approach a variety of lenders to obtain one. Apart from banks and communities oriented to nonprofit credit unions, installment loans can be acquired from numerous money lending stores and newer online lenders. When shopping for loans, always be sure to compare interest rates and type (that is, whether fixed or variable), payment length, repayment plan, and other terms.
If you have a poor credit score you can still apply for installment loans provided you can afford the repayments. However, lenders will want to determine your loan eligibility by verifying your income, credit history, checking account information and employment.
Applying at a store. If you’re someone who prefers talking in person to a loan expert, then applying in person at a store is definitely for you. It involves the filling out of a paper application to provide your personal information and income source details. After reviewing the paperwork, your lender can usually provide you the cash on the spot; some may also offer money orders.
Applying online. For most people, applying for installment loans online is far more convenient — not to mention quicker. You can apply for a loan at the comfort of your home using a computer, mobile, laptop or tablet without the need to follow any particular business hours. You also have the added benefit of being able to compare many online lenders who are ready to offer you the desired loan. Most online lenders will need to perform a soft credit check in order to provide you the best interest rate and affordable installments. Once the loan is approved, the funds will be automatically deposited in your bank account. You may also be provided with an auto pay option to repay installments at a stipulated time, preferably around your payday.
So there you have it. Just remember, when it comes to installment loans, not all lenders are the same — so be wary of interest rates and keep your borrowing to a minimum. One last item: When applying for installment loans online,keep in mind that installment loans may not be legal in all US states.
Photo Credit: cdn.pixabay.com
Great post! Thanks for sharing the article and keep up the good work.
I felt the information provided in this blog is really valuable for people. As you mentioned auto loans, student loans, mortgage loans, personal installment loans can all be referred to as an installment loan therefore one can approach a variety of lenders to obtain one. Thanks for sharing this advice.
It is true that installment loans are better than balloon loans like payday loans and other loans that require a borrower to make one lump-sum payment. However, the article fails to mention some of the drawbacks of installment loans. For example: when the duration of the loan is longer than 6 months, the APR on installment loans begin to resemble that of balloon loans. Just like with anything else, educate yourself before making a financial decision.
Hey, Dave. Loved you when you played for the Padres!