Finding the best online installment loans for bad credit
With a bad financial history, qualifying for a loan may not be that easy. Your credit score is one of the main things that traditional financial institutions and even alternative lenders consider before approving a loan.
Having a bad credit score means that you do not meet their requirements and it can be tough convincing the lender that you are able to pay the money back. But this also doesn’t mean that there are no loan options available for people with less-than-stellar credit.
The trick here is to shop around and find a lender who specifically offers these types of loans. Among the types of loans offered by these lenders are installment loans for bad credit.
These loans can be a good option if you need cash for short-term or long-term financial needs and you can qualify for them even if you do not have an attractive credit.
How installment loans work
One advantage of installment loans, especially when you apply for them online is that they have a fast application and approval process. You can easily have your loan application approved, provided that you can prove you are able to pay the money back.
No credit checks are done; only basic personal and financial details are required when applying. You can complete the online application within a few minutes and you can also receive a response within seconds.
Once the lender reviews your application and is satisfied that you qualify for funding, you can receive the funds in your bank account as soon as one business day.
The loan is repaid in regular installments. Most lenders require you to pay these installments on a monthly basis, although there are others who will require weekly payments depending on the loaned amount.
Provided you make payments on time, you won’t have to worry about paying a lot of interest. Making full and timely payments will also have a positive impact on your credit score. The best thing about installment loans for bad credit is that they have a flexible repayment schedule, meaning that you are able to repay a portion of the debt and still take care of your monthly bills.
There are different types of installment loans for bad credit. They include:
Personal installment loans
These types of short-term loans can be used for different purposes including paying your credit card bills, consolidating your debts among other expenses. Unlike payday loans which are only offered for emergency situations, personal loans can also be used for long-term financial goals. In fact, you can also apply for these loans to help rebuild your credit.
This is also another popular type of installment loans. Mortgages are usually offered in large amounts of money and they also have longer loan terms. Usually, you have to provide a down payment that is normally 3-20% of the amount borrowed.
You can consider applying for an auto loan if you want to purchase a new car. Just like personal installment loans and mortgages, the money is paid in installments over a period of time. The loan is secured by collateral, which is usually the car you want to purchase.
Auto loans have a term ranging from 24 to 48 months. The term can be longer depending on the amount you have borrowed.
Why your credit score matters
Personal credit scores can determine whether you qualify for a loan and the rate of interest that you will be charged. If you have a low credit score, it may be hard to qualify for larger loan amounts and your rate of interest will also be higher compared to those with good credit scores.
Lenders who are willing to work with people with poor credit put more focus on your ability to repay the loan rather than your credit score.
To have your loan approved, you need to have a steady source of income and a valid checking account. Even before you apply for the loan, it is also important to ensure that you meet all the requirements that the lender wants.
There is no guarantee that your loan application will be approved, but by doing this, you will increase your chances of getting approved.
Online installment loans
With installment loans, you can easily get access to quick cash. It is easy to apply for the loans online and compared to banks and online lenders also have less stringent requirements. The whole process takes place online and since the loans have a longer term, it is easier to pay back the debt.
You can still be approved for an online installment loan even when you have poor credit. You only need to prove that you can pay the money back by having a steady source of income. Making regular and timely payment can also boost your credit score.
Choosing the best lender
There are quite a number of lenders who offer installment loans for bad credit online. Most of these lenders are genuine, but there are also others who are not. The lenders also have varied rates of interest and terms and conditions for the loan, which is important that you compare your options and only work with a lender who offers more convenient terms.
The two main things to look for when applying for the loan are the interest rates and additional fee charges. They are the ones that will determine the total cost of the loan. Your credit score can also have an impact on the interest that you will be charged. If the lender offers a longer repayment term, you will also be charged a high interest.
Requirements for an installment loan
Once you met all the requirements, the lender will review your application and you can get a response within a few minutes.
The main requirements for installment loans include;
- You should be a U.S resident
- You should be above the age of 18 you should have an active checking account
- You should have a regular source of income
- You should have a working telephone number
Conclusion on installment loans for bad credit
Borrowers with less-than-stellar credit may have a rough time qualifying for a loan. Among the types of loans that you can easily qualify for if you have poor credit are installment loans.
Compared to other types of online loans, installment loans are more affordable. If you pay the debt on time, your credit score will also improve.
It is important to ensure that all the requirements are met when applying for an installment loan online. You also need to make sure that you are working with a reputable lender to avoid being scammed.