How Does A Direct Lender Installment Loan Work?
Do you know what an installment loan is? Do you know how many payments to expect with a direct installment loan and what the average annual percentage rate will be? Or what type of credit score it takes to get approval for an online loan. These are common questions that visitors ask us when they’re using our site to compare top unsecured lenders. Let’s get right into it and answer these questions so you can get back on track and compare the leading finance companies!
The types of direct installment loans listed on the sites above have been around for years. With an installment loan, the borrower agrees to repay it over months or even years. This financing structure differs from a payday loan or cash advance. The reason is that these loans are generally paid back in weeks or even days.
Loan amounts start at $500 and go up to $50,000. In California, a direct installment lender will often set a minimum loan amount of around $2,500. Most companies 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 personal loan lender.
Most companies in our directory of lenders will offer some form of an installment loan. With that, there are still variations of what most people consider an installment loan. Take the traditional personal loan, for example. Some companies that provide personal loans market these offers as payday loans and cash advances. With this form of borrowing, the loan amount is paid off over a much shorter period. Secured loans are another example of paying back the borrowed amount over a set time frame.
With a traditional mortgage loan, a house or property is securing the collateral. The amount owed to the mortgage lender is paid back over a matter of years, typically around 20-30. A secured vehicle loan is no different. A borrower takes out a loan to purchase a vehicle and pays back the full amount in installments over 1-5 years.
You will notice a few differences between a direct lender installment loan and a payday loan. For instance, those with a good credit score will see a higher approval rate and better repayment terms with a personal loan versus a $1,000 payday loan. With this type of personal loan, an applicant should expect a high APR in exchange for the opportunity to borrow money. Most people who apply for these loans have poor credit and few other lending options. Additionally, most direct lenders won’t 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.
A direct lender may want to check credit to see if there are any other personal loans or serious credit delinquencies. Direct installment loan companies don’t require excellent credit, but that doesn’t mean they won’t look at someone’s financial or bank history.
Compare Top Companies With Our List Of Online Installment Lenders
We try to break down each company that offers direct lender installment loans. We also include specific information that we know about some installment lenders. Some bits of information that we list include common lending questions. For example, how long has that lender been in business? What to expect with the application process, loan term agreement, and monthly payment schedule? Does the direct lender offer bad credit loans and work with borrowers who need to improve their credit? If so, what interest rate can you expect with poor credit? These are helpful bits of information to use when picking a lender.
Direct installment loans and online cash advances should only be a last resort. Be sure this type of financing is for emergency financial needs only. To avoid fees and extra interest charges, all borrowers must repay their loans within the allotted time.