Do you know what an installment loan is? Do you know why they are different from payday loans or 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 visitors to this site. Let’s get right into it and answer these questions so you can get back on track and compare the top installment loans!
The types of installment loans 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 financing structure is different from a payday loan or cash advance. Reason being, a payday loan is generally paid back in weeks or even days. Most payday or cash advances are paid back in 1 or 2 payments. At this point the total amount is paid back in full. With a direct installment loan, a borrower can expect 6 payments, 12 payments and sometimes even up to 60 payments. It all depends on the lending terms between the lender and borrower.
You may have a few questions about this type of borrowing. For example, why would anyone agree to make payments over a period of months instead of a few weeks with an online payday loan? The difference is that installment loans are for higher amounts than traditional short-term lenders. Most direct lenders 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 the set minimums and maximums when it comes to the amount you can borrow. In California, a direct installment lender will often set a minimum loan amount of around $2,500. Most lenders do this to adhere to California finance lender regulations. Many states have specific limits to protect consumers from aggressive personal loan companies. Be sure and check with your state before you sign a contract with a direct lender.
You will notice a few differences with installment loans versus payday loans. For instance, those with a better credit score will see a higher approval rate compared to a cash advance. We all know that most everyone will qualify for a payday advance 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 who apply for these types of loans have poor credit and don’t have many other lending options to choose from. Banks are often reluctant to extend credit to someone who has bad 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 you should have no problem getting a direct installment loan. With an online loan, the qualification will be longer as the lender is providing a larger amount. With companies that offer unsecured loans, you will need to show employment history and the ability to pay back the total amount. On top of the that, the lender may want to run credit to see if there are any other personal loans or serious credit delinquencies. Installment loan companies don’t require excellent, credit but that doesn’t mean they wont look at someone’s financial or bank history. Most companies that offer online installment loans have internal qualification standards. They provide terms and conditions which you need to follow. These are in place to determine if an applicant is credit worthy. It all depends on the process of each individual lender.
We try our best to give as much information as possible about each lender that funds direct lender installment loans. We try to source as much information as possible from the individual lender websites. We also include specific information that we know about some installment lenders. Some bits of information that we list that may be helpful include the following. How long has that short term financial lender been in business? What to expect with the application process and the monthly payment/interest rate. Does the direct lender offer bad credit loans and work with borrowers who need to improve their credit? If so, what type of interest rate can you expect with poor credit? These are helpful bits of information to be used when picking a company. The most important thing you need to know is if a specific online installment lender is able to fund direct loans in your state. This may not seem important, but believe us there is no way to get a loan from an unlicensed company in your state. The last thing you want to do is apply online, only find out they don’t fund bank or installment loans. As always make sure that this type of short term borrowing is something that’s needed. Don’t borrow money to pay for something you want. Short term payday loans and cash advances should only be a last resort. Be sure this type of financing is for short term financial needs only. It’s critical that all borrowers pay back their loan within the allotted time to avoid fees and extra interest charges.