Installment loans can be quick and convenient. They offer access to a large amount of money quickly, after all, and their repayment periods are longer and more flexible than the repayment periods of cash advances. Consumers appreciate that they’re able to decide just how much money to borrow and how long they will need to pay that money back. However, despite all these benefits, an installment loan may not be helpful to your particular situation if you don’t understand the details involved. So before you apply, let’s answer the all-important question: how does an installment loan work?
How Does an Installment Loan Work?
In some ways, an installment loan works like any other loan. You, the borrower, will be given a specified amount of money by the lender. Then, over time, you will pay back the money that you owe. The service is not free though, of course. In addition to paying back the principal (the sum of money you were lent), you will also pay interest. The quicker you pay off the loan, the less interest you will have to pay.
Installment loans are known as installment loans because they are repaid in equal installments at fixed intervals. Although most payment schedules require biweekly or monthly payments, your lender may offer other options. Installment loans vary in length as well.
Because they offer larger loan amounts and longer repayment periods than cash advances, installment loans are often preferred by borrowers who need a large and flexible loan. However, they are not ideal for every borrower. In some states they are not available, for example. In others, laws restrict the minimum and maximum loan amounts and/or regulate the length of the loan.
Borrowers appreciate that installment loans are quick and simple. Generally, this is how they work, though your situation may vary from the norm:
- Due to an unexpected situation, you need a somewhat large amount of money.
- You research lenders online and find a direct lender that is reputable and offers excellent customer service.
- After checking that the loan amount and length fit your situation, you apply for a loan.
- Ideally, you will be approved within 24 hours and receive your loan.
- You pay off your loan using the manageable payment schedule established by the lender.
To ensure that you’re satisfied with your loan and lender, be sure to thoroughly research both beforehand. Note the interest charges (typically represented as an APR) and calculate how much you will be paying in all. In addition, review any applicable fees and contact the lender if you have questions. The lender should fully disclose all of these details in a way that is easy to understand.
Finally, if you’re looking for an installment loan from a direct lender, check out Advance Paycheck Online. We offer short-term advances and installment loans online to the residents of three states: Illinois, Utah and Wisconsin. Our flexible payment schedules will help you pay off your loan as soon as possible, and we prorate the fees involved so that if you pay off the loan early, you will have very few fees to pay. To get started, please contact us online or give us a call at 1-815-436-4242. We would be happy to help!