Installment loans for bad credit – Apply now in minutes

 

online installment loans for bad credit

When the need of an extra income source arises and your cash balance is not enough, installment loans can offer a great solution. Regardless of whether you seek for additional funding that covers emergencies such as medical or family emergencies, or are looking to buy something that makes your life simple, you want to reduce the cost as much as you can. Sometimes you will not succeed in getting friends or family to lend money to you at zero interest, but online lenders, banks and credit unions can sort you out on installment loans for bad credit.

 

What are installment loans?

installment loans for people with bad creditThese are a form of consumer credit, which exists in three forms – installment loans, revolving credit, and short-term loans.

The major source for revolving credit is credit card payments, short-term loans come from payday loans, and installment loans come from credit unions and banks.

In short, they are loans that you repay over time through set payments that you schedule in advance, and the usual is making two payments towards the loan.

Traditionally, people tend to avoid installment loans because they view credit unions and banks as inconvenient ways of getting loans, so they only get them when dealing with purchases if larger amounts such as the mortgage or cars. However, the situation is different today – online lenders are now offering a simpler way of getting installment loans for bad credit, leading to increase in their popularity.

 

How installment loans work

 

Installment loans are of two types – closed-end loans and unsecured/secured loans.

  • Closed/fixed term loan – these have a set date of starting and ending, and the determination of the dates happens in the application stage of the loan. You receive the loan funds on the set date, and then proceed to repay the money in regular installments, which also include a portion of the principal and interest.
  • Unsecured/secured – you can refer to unsecured loans as signature loans, since you secure them only through your signed contract that represents your promise to repay the money. Secured loans, on the other hand, have collateral that acts as a backing, and the lender can seize the collateral if you fail to pay. For instance, mortgages are secure loans because the property backs them up. Secured loans are good ways of getting loans at low interest rates.

 

The cost of an installment loan

installment loans online for bad credit

 

The cost usually comprises of installment charges, as well as other applicable fees. The agreement between you and the lender should explain the terms of the contract, as well as the charges and fees.

In addition, U.S. law requires that the lender put all charges in terms of dollars and factor in APR (Annual Percentage Rates).

 

Qualification for bad credit installment loans

Installment loans are not applicable in all states. However, if it is applicable in your home state, the lender will factor in your credit history and income level to determine your qualification and the limits that you can borrow. The state laws can also determine the maximum and minimum amounts that you can borrow.

When applying, you complete a loan application form and submit it with extra information like verifying your income, checking bank account information and your identity.

 

Getting installment loans bad credit

 

  • Avoiding short-term lenders

 

Credit unions and banks may refuse to lend money to many borrowers, resulting in the next solution – short-term lenders. However, there is no difference between short-term installment loans and payday loans.

You can receive your money instantly, which is nice – but this often comes at a heavy price because of the frequency of due payment days (only a few days apart) and the high rates.

 

  • Tough and slow banks

 

These are, more often than not, the first source of installment loans. They offer them for many users, including car loans, student loans, mortgage, and personal loans.

A disadvantage with banks is particularly in giving unsecured loans, it gets even stricter; banks keep very rigorous credit requirements to approve borrowers. If you have marginal credit, you will need a trustworthy co-signer to help in your application.

The other problem is the long process of loan applications. It takes even weeks or months before you get the finances, and that is only if you qualify in the first place. For this reason, they may not be a viable option when you are seeking an instant solution.

 

Best options for installment loans for bad credit

Many direct lenders of installment loans for bad credit will not just focus on your credit score (especially if you have struggles in the past with money matters), but your repayment ability. That means you need to have a steady income source as well as a valid bank account.

You may be interested in the following features that come with an installment loan:

  • Varying amounts of loans
  • Varying terms of loan payment periods
  • Different times of processing loan requests
  • Different charges in contracts

 

Note to readers: We recommend that you do not rely on installment loans alone to get you out of financial ruts. You can explore other options, such as credit protection on your checking account. If you decide to go for the installment loan option, we are not direct lenders, and neither are we responsible for the actions or decisions of lenders in general. Make sure to understand the terms of use between you and the lender through your contract.

 

Conclusion

installment loans for bad credit direct lender

Installment loans are a good option to have, but bad credit may hinder you from getting the service. For this reason, various online lenders have come up to provide the service, and you can seek the loans as long as you confirm that you have a steady income and bank account.

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