Do you know what an installment loan is? Do you know what makes installment loans different from payday loans or traditional bank loans? Do you know how many payments to expect with an installment loan and what the average interest rate will be? Or what type of credit score it takes to get approval for an online loan. Don’t stress if you don’t know the answers to all those questions! These are common questions that we’re asked by people that visit this site. Let’s get right into it and answer these questions so you can get back on track to finding a top installment lender.
The types of installment loans that you see listed on the sites above have been around for years. With an installment loan, the consumer is agreeing to pay back a set amount of money over a period of payments. These payments can last for months or even years. This type of loan structure is different from a payday loan because a payday loan is generally paid back in weeks or even days. Most payday or cash advance loans will need 1 or 2 payments and then the loan should be paid back in full. With installment loans, a borrower can expect 6 payments, 12 payments and sometimes even up to 60 payments. It all depends on what is agreed upon between the lender and borrower.
You may ask yourself, why would anyone enter into an agreement where a loan is paid back over a period of months instead of a few weeks with a payday loan? The difference here is the fact that installment loans are issued for much higher amounts when compared to a traditional short-term loan. Most installment loans will start at $500 and go all the way up to $50,000+. It depends on what an individual company is willing to lend. Some states have laws in place that limit that set minimums and maximums when it comes to loan amounts. In California, for example, a direct installment lender will often set a minimum loan amount of around $2,500. Most states have specific limits like this so be sure and check with your state before you enter into an agreement with an installment loan direct lender.
Another factor that differentiates online installment loans from online payday loans involves the applicant’s credit score. We all know that most everyone will qualify for a payday loan regardless of their credit score. With this type of short term loan, an applicant will get a high interest rate in exchange for the opportunity to borrow money. Most people that apply for these types of loans have poor credit and don’t have many other lending options to choose from. Most banks will be reluctant to extend credit to someone that has poor credit. Additionally most short term lenders won’t even check an applicant’s credit score. If you have verifiable employment, direct deposit and no past bankruptcies there should be no problem getting a loan. With an online installment loan, the qualification will be longer as the lender is providing a larger loan amount. With most companies that offer installment loans, you will need to show employment history and the ability to pay back the loan. On top of the that, the installment lender may want to run credit to see if there are any other personal loans or serious credit delinquencies. Installment lenders don’t require excellent credit but that doesn’t mean they wont look at someone’s financial history. Most companies that offer online installment loans have internal qualification standards in place to determine if an applicant is credit worthy. It all depends on the individual lender.
We try our best in the above Lender Comparison to give as much information as possible about each lender that funds online installment loans. While we try to source as much information as possible from the individual lender website, we also include specific information that we know about some lenders. Some bits of information that we list that may be helpful include the following. How long an installment lender has been in business. What to expect with the application process and the loan amounts/interest rates to expect with each installment loan. While these are helpful bits of information, the most important thing you need to know is if a specific installment lender is able to fund loans in your state. This may not seem important, but believe us there is no way to get a loan from an unlicensed lender in your state. The last thing you want to do is apply for a few online installments loans only to find out they don’t fund installment loans in your state. As always make sure that an installment loan is something that’s really needed. Don’t take out any loan to pay for something you want. Direct Installment loans should only be a last resort. It’s critical that all borrowers pay back their loan within the allotted time to avoid fees and extra interest charges.