The word “installment loan” may be new to you, but you may have used actually used it at one point in your financial journey. It refers to a short term loan that allows you to borrow a certain amount of money over a period even when you have a pending loan. Installment loans with friendly Lender come in handy when an emergency strikes given that you can get instant funds within a short duration. In this article, we will tell you more about installment loans online.
Types of Installment Loans
In as much as you would want to avoid loans, we know that emergencies can pop any minute, and understanding the type of installment loans puts you in a safe position in such scenarios. There are generally, a payday loan or short term loan with varying repayment periods. Here are some of the installments loans online you ought to know:
Everybody wants to live in a nice house, but if the savings aren’t enough, a mortgage is a way out. A mortgage is an installment loan that allows you to buy a house. Generally, they have the most prolonged repayment durations of the types of installment loans. There is a nice article where you can learn more about mortgages. The article covers the main types of mortgages including mortgages for first-time buyers
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2. Personal loans
As you may have guessed, personal loans help you to take care of personal needs; bills, health expenses, traveling, and others. Because they do not require collateral, of all types of installment loans, they have the shortest repayment period and the highest interest rates.
3. Auto loans
Auto loans are designed to help you get a car. Depending on the lender, the repayment periods will also tend to vary.
Installment loans can be collateralized or non-collateralized. For example, a mortgage loan will be collateralized with the house being purchased and an auto loan with the vehicle. To get any of the installment loans listed above, you need to fill in a form provided by the lender. Here, you will be required to provide personal details, the amount, and the purpose. The lender will proceed to review the creditworthiness such as the legal age, financial competence, and credit score to determine if you can receive any amount and if yes, how much. This is followed by a discussion about the down payment, payment amount, and the duration. In some cases, the borrower may be requested to pay for the application processing fees and loan origination fees.
Benefits of Installment Loans Online
1. The convenience of the application process
You can conveniently apply for a loan online, and depending on the working strategy of the lender, you can get a response within minutes or a few days. In addition, online application allows you to review the data before sending and send clean copies, unlike in hard copies.
2. Quick funding
When looking for fast financing, credit unions, and banks are often discredited because of the lengthy waiting process and the daunting tasks. As if that is not enough, the transaction process can take days or weeks. With online installment loans, on the other hand, once the application is reviewed and approved, the money is transferred almost instantaneously to the account.
3. The flexibility of the terms
Yes, you read that right. Online installment loan lenders tailor the conditions according to the needs of the borrower, such as the amount and the repayment duration. This is contrary to the process in the majority of financial institutions. Usually, the terms are standardized, and there is a slim-to-no-way of negotiating the terms to suit your financial capability.
Many borrowers settle for long-term loans because they will pay small amounts and have enough for basic expenses.
4. High loan amounts
Local laws regulate the majority of online installment loans. As a result, you may realize that residents in particular regions get higher loans and longer repayment durations than others. Nonetheless, the amounts in online installment loans are generally high.
5. Options for all credit ratings
When you have a poor credit score, all doors to getting a loan seem to be locked from the inside, and you are left in the cold to freeze. But that is not the case, thanks to online installment loans. Even when the credit score is poor, some lenders go the extra mile and give small amounts that can help solve some financial problems.
What to do when choosing an online lender for an installment loan
The best way of finding the right installment loan is by familiarizing yourself with the products in the market. Not to scare you, but the term “installment loan” is predatory, and anyone can fall victim. Online money lenders have flooded the internet, but not all of them are legit. Some lend money and act contrary to the terms.
As a result, you must exercise extreme caution when choosing a lender. Some guiding questions include: is the lender legally registered? What do others say about the services? What are the terms, and are they flexible? Compare the lenders, seek reviews, and inquire from others. Doing the research and gathering the information sets the pace for everything else. Eventually, you will know whether to settle for a particular lender or keep looking.
Another tip that will help you secure the right loan is reconsidering your thoughts. The majority of financial experts recommend sleeping on the matter for a few days because what may appear as a ‘need’ may be a mere ‘want.’ This, in return, helps in making an intentional decision. Finally, do not fall for long-term loans. While they ease the financial burden, the deal may not be as good as it appears at first glance. Some lenders take advantage of the fact to increase the interest rates, and this can significantly damage your financial status.
Getting a loan is a mental process as much as it is physical because you must know how you will repay. So, as you think about online installment loans as financial safety nets, be sure to gather as much information as you can and when the time comes, make informed decisions.