What is an installment loan?
Simply stated, an installment loan is a cash loan that requires a fixed number of regular payments that are equal in amount. Payments on an installment loan are calculated over a set duration. A home mortgage, for example, is a type of installment loan.
Installment loans versus traditional loans
Fortunately, today’s lending market offers quick and easy solutions for Americans to get the financial assistance they need, especially in situations where paying off a loan in one lump sum is not a feasible option. In these cases, customers have the option to take out an installment loan that contains a fixed interest rate and regular payments based on the length of the loan agreement.
Who should consider an installment loan?
Anyone who needs money quickly and is building credit and can make regular repayments, is a candidate for an installment loan.
What can you do with an installment loan?
In most cases, people take out installment loans to cover unexpected expenses that arise, need extra money to cover a specific event or want to pay off credit card balances. But the truth is, what you do with the funds is up to you.
Here are just a few ways you can use an installment loan:
The typical use for an installment loan is to pay for unexpected expenses and or emergencies, like medical bills.
Installment loans allow you to pay off unsecured debts, such as multiple credit cards, into one, easy-to-manage regular payment.
Student tuition is very expensive and requires large lump sums of money at time. In this case, installment loans are a way customers can pay for tuition if they do not have the entire amount up front.
In most cases, a purchase of a car requires a down payment. Installment loans can be used to cover a down payment for purchase, giving you an alternative to other, more expensive forms of credit.
Rather than relying on high interest credit cards or depleting a savings account, many people opt to get the money they need to pay for home repairs or improvements with an installment loan.
What are the advantages of installment loans?
There are many advantages to taking out an installment loan, including a typically easy application process, fast approval and money in a checking account in a matter of a few business days.
Installment loans checkboxConvenience: unlike brick-and-mortar loans, online installment loans let you to shop, compare and apply from the privacy and comfort of your home.
Installment Loans checkboxCompetitive rates: because there are so many lenders, interest rates are competitive and can be easily compared when shopping for an installment loans, online.
Installment Loans checkboxEasier approval process: with installment loans, customers are required to submit less information than traditional loans and receive notice of approval within minutes.
Shopping for an installment loan
Just like every financial situation is different, every online loan lender is different. When shopping for the best installment loan for you, it’s a good idea to compare the interest rate, fees and APR between the loan options. Some things to look out for are prepayment penalties and automatic rollovers. It’s also a good idea to check a loan’s term and payment schedule beforehand.
Installment loan rates and terms
The terms on an installment loan varies, and RISE allows for a maximum term of two years. After money is received in a checking account, the customer is required to repay the loan in regular installments. Installment loans typically have fixed interest rates, and payments are based on balance, interest rate and term of the loan.
Know before you borrow
Since there are so many lenders, which one is best? It’s hard to tell without doing the research. Those seeking an installment loan should be aware of lenders advertising online loans for bad credit or loans with no credit check. These kinds of online loans may have higher interest rates and unusual terms and penalties.
How to apply for an installment loan
In most cases, applying for an installment loan is quick and easy. Applicants for installment loans must complete an application and show proof of an active checking account. Underwriting is completed by underwriters and automated systems, and the applicant is notified in writing of the decision to approve or decline the loan. With RISE, installment loan customers get their money as soon as the next business day.*