Some of us have heard of the term “installment loan”, but what does it really mean? An installment loan is a type of loan product that provides a borrower with a smaller lump of money typically paid back over an agreed time for a specific reason.
Similarly to any loan product, each payment will consist of a portion of the principal plus the interest rate. Secondly, installment loans can be secure or insecure, are commonly used by individuals who need quick funds, and are designed to be cheaper than credit cards.
In contrast, installment loans are a different type of personal loan option with more flexible credit requirements but a lower loan option, designed to work better for individuals with lower credit and designed to be shorter periods.
Payday loans are short-term loans designed to provide borrowers with access to emergency funds. They are typically due on the next payday, and borrowers are only eligible for smaller amounts.
On the other hand, installment loans have longer repayment periods, lower interest rates, and can be used for a variety of purposes. Our installment loan partner offers an easy loan approval process similar to payday loans, which helps individuals who may have a more challenging credit history.
If you have a higher credit score, it is definitely recommended that you apply for a personal loan because they have lower interest rates and higher loan amounts. However, personal loans have a much stricter approval process, making them a more challenging loan option.
Installment loans can vary quite a bit depending on which one you choose. In this article, we will be focusing on short-term installment loans, which are loans issued for a shorter period of time and usually for smaller amounts.
Lenders that offer short-term installment loans are a great choice for individuals with more challenged credit who need a longer-term loan compared to payday loans. This loan product can have an easy approval process similar to payday loans and offer lower payments.
Short-term installment loans work by having a simple application process, and once your information is verified, you can sign your documents and get the money in your account quickly.
Due to their easy approval process, lenders typically require information such as a source of income, a bank account, and being at least 18 years of age. However, the approval criteria can vary depending on the lender
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Installment loans are classified into different categories and can either be secured or unsecured. Secured installment loans usually require some form of collateral, while unsecured loans are typically approved based on your income and credit score.
Choosing the right loan will vary by the individual because loans can vary in APR, loan origination fee, terms, and different fine print. Choosing the right installment loan can vary by the individual, here are the most common installment loans:
Car Loans: Looking to purchase a used or a new car, car loans be one of your finance options. Auto loans are usually secured by the car you purchase and in most cases come with fixed interest rates and repayment periods between 24 months to 84 months.
Home Loans: Buying a home is a process that many of us will do. A home loan is usually a secure loan that is secured by the property itself. Mortgage loans vary due to all the programs offered by lenders. But usually, mortgages will be anywhere from 15-30 years.
Education Loans: Education loans will usually be unsecured and are provided by private or federal agencies. These loans are designed to help individuals pay for schooling, unlike other loans you generally do not require to make payment on them immediately. Usually required to pay them after you are done with your education.
Personal Loans: A personal loan is a great choice for individuals that need money for their personal use. These loans will come unsecured and are designed to have full freedom of what they can be used for. Typically there are fixed interest rates and can vary anywhere from a 1-7 year repayment period. Since there is no collateral lenders focus on the buyer profile and look at things such as credit score and income.
If you’re looking for a loan, an installment loan could be an amazing option. If you are able to make timely payments and repay the loan on time it can boost your credit score as a good benefit.
Installment loans can differ, and there are various types of loans available, such as auto loans, mortgages, student loans, and personal loans that you can utilize for any purpose.
Additionally, you have the possibility to get approved for any of these loans. Something to keep in mind installment loans will come with an interest charge, meaning the better your credit score is the more favorable rates you are able to encounter.
Due to the big pool of lenders, you are able to apply even with sub price credit score, but there might be higher interest rates. Be sure to shop around to find the right lender. These are the steps you can take to get approved for an installment loan.
Whether you need a loan in Canada or in the USA you should always be informed about the lender you select. When selecting a cash advance company to borrow money from and personal loan companies, transparency is key.
This disclaimer is for educational use only and should not be considered legal advice. Brainy Loans has no official government affiliation but complies with both provincial and federal laws in Canada and the United States.
The APR | The Annual Percentage Rate is the actual rate at that your online loan accrues and is based entirely upon a group of factors, including but not limited to the amount and interest attached to your loan, the term, repayment amounts and the payments schedules. Only the approving lender may give you your loan terms.
By law, in Canada and the United States, the payday lender must provide the APR before you enter into any loan agreement. The owner/operator of this site is not a payday lender, loan broker or agent for any lender or loan broker.
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The Implications of Non-Payment | In the case that you do not repay your loan on or before the loan due date, your loan will be considered “delinquent” and will be subject to a fee defined by the lender.
In addition, your bank will charge you an NSF (non sufficient funds) fee for the failed item. The rate of interest will continue to grow on the unpaid balance. In the event that you fail to repay your loan you will not be allowed to borrow from the lender again until you have paid of the balance in full.
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