Everyone needs money; this is a basic fact of modern life. However, if you need a specific sum of money right now and you don’t have enough in your bank account, you may need to borrow it from someone else. In this situation, most people turn to credit cards or home-equity loans, but if you don’t have an exemplary credit history or your income is quite low, you may be steered toward installment loans as an alternative. Before you jump in headfirst, you’ll need to learn how these loans work, how much money they offer, and whether they fit your particular needs and goals. So what is an installment loan? Let’s find out . . .
What Is an Installment Loan?
An installment loan is a one-time sum of money lent from a “lender” to a “borrower” that must be paid back with interest. It is typically a consumer loan, and the principal and interest are repaid in equal installments at fixed intervals (typically monthly or biweekly). They vary in duration, from a single month to decades on end, and they are viewed as a safer alternative to payday loans.
Although an installment loan can be helpful in many situations, it is important for you to carefully consider the fees and fine print before you sign up.
When to Use Installment Loans
Installment loans are typically offered in the range of $100 to $10,000, though this varies by state, lender, and type. Mortgages are a type of installment loan, for example, and they are obviously offered in much larger amounts. Installment loans are great for sudden purchases, when you haven’t had a chance to save up your money. For example, you may want an installment loan to pay for a new car, an unexpected home repair, or a crucial business expense.
Qualifying for an Installment Loan
To determine whether you qualify for the loan and what your interest rate will be, lenders will examine different facets of your financial situation. However, that doesn’t mean that you need an exceptional credit score in order to qualify for an installment loan. In fact, some lenders don’t require a credit check at all. At Advance Paycheck Online, we only ask that you have a steady income and a bank account. It’s as easy as that!
Paying Off an Installment Loan
Installment loans typically use a fixed payment schedule, which will make it easy for you to plan ahead. Each time you pay, you reduce your total loan balance. However, you’re also free to pay more than the minimum payment if you like. You can even pay off the entire loan at once, eliminating the usual fees involved.
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!