Guide to Online Installment Loans: What You Need to Know
Do you need quick cash for your business or pay your loved one’s medical expenses. During these events, taking online installment loans can be both easy and convenient in terms of the application and repayment.
What are installment loans?
Installment loans are easier to repay compared to other loans. You don’t need to pay it in full like a payday loan.
It is easier to pay because you are given the opportunity to repay your debt in equal, usually smaller payments over an agreed time. If you’re thinking of getting this type of loan, applying online may be a smart idea.
Most of the time, payment is only once a month. There are also bi-weekly or weekly repayment plans in some lenders. Installment loans are for the short-term only.
However, it is bigger and offers a longer repayment term when compared with a payday loan. The bigger the amount, the longer the repayment, the higher the fees.
How to Qualify:
You need to satisfy certain requirements to get approved for the loan. Here are the basic requirements that you need to submit online:
- Valid government-issued ID.
- Proof of income.
- Active bank account.
- Citizenship or proof of address.
What do you need to consider when applying for installment loans?
- Interest rates. One of the major considerations when applying for this type of loan is the interest rate. You need to know beforehand how much interest you’ll be paying. If they are not transparent about it, you need to look for other lenders who can provide an upfront computation of your annual percentage rate (APR).
- Amount of loan. Shop for lenders that can provide the amount of money you need. You must ensure that you’re only borrowing what you can pay. Otherwise, you’ll end up in the pit of debts.
- Fees. Check whether you must pay a fee for your loan application. Aside from that, ensure that you know if they are asking for extra fees during late payments. You must be aware of these fees before taking any loan.
- Processing time. How long do you have to wait before you can get approved? Do you have to wait for several days or weeks? Would you receive it on time?
- Term. You need to be aware of the loan terms. You should determine how long you’ll repay it. Don’t forget that in short-term loans, you’ll pay lesser of the interest compared when getting a long-term loan.
Benefits of online installment loans:
- They don’t depend on your credit history.
Just like payday loans, installment loans online don’t consider your credit profile to get approved. As long as you have the capacity to repay, you can get approved.
- Quick processing.
Getting this type of installment loan is fast. Since the process is done online, you can get the results within minutes. You’ll just fill out the form, submit the requirements, and wait if you are qualified.
- Flexible payment.
Unlike a payday loan that must be paid on your next paycheck, getting an installment loan is more flexible and manageable during repayment. You pay a smaller amount over time. It is less stressful on your part because you can still manage your finances without thinking that your entire paycheck only goes to paying your loan.
- It helps build your credit.
When you pay in a timely manner over a long period of time, it can help you build a good credit standing. It’s a good record to show that you have paid a long-term loan when you apply for bigger loans in the future.
- Simple and few requirements.
Applying for a loan on traditional lenders or banks require a lot of requirements. You may be asked to submit your credit history or additional requirements.
However, installment loans online don’t ask for these. You only have to show your bank details, attaining the legal age of 18, citizenship, and proof of income.
Installment loans may be a good solution if you’re looking for quick cash and would allow you to repay over time. Before taking any loans whether it is like a payday loan or installment plans, make sure that you can make consistent payment.