What exactly is an installment loan?

Any loan that is paid in ongoing fixed regular installments can be considered an installment loan. Good and bad credit installment loans online can technically be any kind of personal loan that is repaid in installments. Though technically any term loan counts as an installment loan, the most common type of financing that goes by that name is a type of short-term loan that gets its name from the way you pay them off — in installments over a period of time. They’re typically available in larger amounts than payday loans — Up to $5,000 — and have longer terms. They’re also not as heavily regulated.

Sometimes referred to as the more respectable cousin of payday loans, installment loans are designed to cover one-time expenses that need a quick fix. You can typically get money fast if you apply for one online and have a longer time to pay it off than a payday loan.

Am I eligible for an installment loan?

Installment loans can be applied for with good credit, bad credit, or on a lower income as long as you are able to afford the payments. Generally, lenders will look at your income, credit history (a lot of times just a background check), employment, and checking account information to determine your eligibility for a loan. Keep in mind that installment loans are not legal in all states so your residency will also have a bearing on your application for an online installment loan.

Is an online installment loan right for me?

You may want to consider an installment loan for the following reasons:

Fast turnaround time. Our network of 100+ lenders tend to process your application very quickly, sometimes in minutes. If you accept the loan contract, you can get your money as soon as the following business day.

Bad credit applicants are accepted. Conventional loans normally come with stringent lending criteria, but most employed people can consider applying for online installment loans with bad credit, as long as they can show their ability to repay the loan.

More manageable repayments structure. Unlike short-term loans or cash advance loans that you have to repay by your next payday, you can take longer to repay your installment loan. Our nationwide lending network may even give you the ability to choose between making payments once or twice a month.

You may want to consider other options if you’re concerned about:

Fees. Online installment loans normally charge higher fees especially in comparison with more conventional forms of credit. Keep in mind this is an unsecured loan and does not require any collateral to put up in order to get it.

Higher repayments due to higher loan amounts. Borrow modestly by repaying responsibly. Installment loans have higher loan amounts than standard payday loans. While you have lower ongoing repayments because you’re paying it back over time, repayments can still be expensive. Make sure it’s manageable on your budget before you sign up.

Total loan cost. The APR on installment loans can still be quite high, resulting in a high total overall repayment.

Who qualifies for installment loans?

People who qualify for our network installment loans typically have:

Verifiable income. This doesn’t mean you need to be employed. Some lenders accept alimony and pension as income.

An active checking account. If you don’t have a checking account, you can sometimes get a cash installment loan from a brick-and-mortar storefront.

Government-issued identification. Lenders might ask to see your driver’s license to verify that you meet the age requirements.

Applicants with good to excellent credit scores are more likely to get a good deal on our online installment loans. That’s because many lenders use underwriting software that rely heavily on your credit history when determining your eligibility.

How do repayments work on an installment loan?

Repayment terms differ depending on what type of loan you apply for. Generally, the following will apply:

Repayment termsDescription
Loan terms.
These vary between 6 and 60 months (5 years).
Payment method.
Our nationwide partner network will usually deduct payments from your bank account on the day the payments are due. Some lenders will also give you the options of repaying the loan online, via a check or through an app.
Repayment frequency.
You will usually repay the loan according to your pay dates.

What can I use an online installment loan for?

You can generally use installment loans online for any legitimate purpose. However, it might be best to save it for emergency situations since they can come with higher interest rates than other types of personal financing. You can use installment loans for things like:

Medical expenses. Sometimes healthcare providers don’t provide financing that all patients qualify for. A installment loan can help make paying it off more manageable. With our healthcare system leaving us with expensive premiums and out of pocket expenses, grabbing an online funding solution can make a huge difference in making sure those unexpected medical bills are paid.

Building or car repairs. The cost of repairs that need immediate fixes can be covered with an installment loan, no mater what your credit type is. This can range from unexpected housing repairs: furnace, hot water heater, A/C, vehicle repairs, faulty transmission, etc.

Overdue utility bills. An installment loan online can help you keep the lights on, water running, and phone line working when you don’t have the funds to make payments on time.

Building your credit. Taking out an installment loan can help you rebuild your credit if you make payments on time. Typically this type of loan is reported to the credit bureaus and can help to show responsible payment history and start to bring your credit score up. This can be a huge builder going into the future with a more solid credit report and payment history to bring better interest rates and terms on your next loan.

What are the benefits of getting an installment loan?

Online installment loans come with various features. Here’s what you should know if you’re considering applying for one:

Convenient application process. Our  100+ partner lender network specifically operates with online applications and because of this, has one of the quickest turnaround time frames from applying to funding available.

Quick funding. You can learn your application status in minutes with our platform, and if approved, you can accept the loan contract. Once you do this, you can expect the money in your bank account as early as the next business day.

Flexible eligibility criteria. Getting online installment loans with bad credit is possible, primarily because lending norms are slightly more relaxed. “Getting an installment loan without a credit check” typically means lenders generally don’t make hard inquiries on your credit score, but you’ll need to demonstrate how you’ll be able to repay the loan.

Variable fees. The state you live in along with the amount of money you borrow has an effect on how much you pay in fees. Not all lenders charge the same fees, so keep this in mind when comparing your options.

Loan amount and terms. Both these aspects depend on state laws. In most states you can borrow up to $5,000 and the repayment period can extend up to five years.

 

Watch out for predatory lenders

Installment loans are not just for people with bad credit, although you wouldn’t know that if you only did a quick Google search. That’s because some subprime lenders repackage what they would have previously called a payday loan as an “installment loan” in an attempt to appear less risky.

Like payday loans, these installment loans tend to come with extremely high interest rates and have similar features that can act as debt traps. But you can usually avoid them if you know what to look out for:

Guaranteed approval. Lenders that guarantee you can get a loan through them before you apply are not looking after your best interest. Most reputable lenders want to make sure you can pay off your loan first before telling you you’re accepted.

Upfront fees or payments. Reputable lenders that charge application or origination fees don’t ask for payment until after your loan is disbursed. Anything else could be a scam.

Pressure to borrow more than you need. Taking out more than you need means you’ll be on the hook for more interest. A lender that pressures you to take out more doesn’t have your interests in mind.

Insurance add-ons. Some lenders push insurance options that sound like they protect you, but really protect them in the event that something happens to you that affects your loan repayment (like death). Lenders typically don’t include this in their APR — even though it’s technically a fee — and use it as a way to get around state regulations on how much they can charge.

The lender approached you. Getting a lot of texts from or robo calls from a lender? It could be a scam. At most, legitimate lenders might send you a letter or two in the mail. Run away if you feel like they’re pressuring you into taking out a loan you don’t really need.

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