Installment loans are a great way to get the money you need to make major purchases. This article will go over what installment loans are, the types of installment loans available, and where you can find the best installment loans.
What are Installment Loans?
An installment loan is a loan that you pay back with fixed payments for the duration of the entire loan. Some installment loans can be a couple of weeks or as long as 3 decades, depending on the amount and the originator of the loan.
Types of Installment Loans
If you have ever bounced around the idea of getting a loan, you are probably thinking about an installment loan. Most loans offered by lenders are actually installment loans.
Again, they are referred to as installment loans since you are paying the amount stated in the loan.
Installment loans are made so that you exactly how much you need to repay on a monthly basis. The payments also occur at a set time.
Although the amount, term and the monthly payment are consistent, interest rates can fluctuate if you have a variable interest rate loan.
What Can An Installment Loan Be Used For?
Installment loans can be used for anything depending on the type of loan. If you get just an unsecured installment loan, like a personal loan, then you can use it for anything you need.
Many consumers decide to use installment loans for emergencies such as a surprise hospital visit or a major vehicle repair. Often times, this comes in the form of a personal loan.
Installment Loan Interest Rates
Most installment loans do have fixed interest rates, but as always, there are some installment loans that include a variable rate of interest.
In fact, most lenders prefer to give fixed rate loans since it makes it easier for consumers to plan, budget, and pay for them.
Many variable interest rate loans will start off at an extremely low rate to catch buyers, but as most consumers know, the interest rates can grow out of hand.
Typically, variable interest rates follow the market index. If interest rates in the market are low, so will the interest rate on your variable interest loan.
Installment Loans and Credit
Before you get an installment loan, its best to check your credit score. Although some lenders are lenient when it comes to installment loans for consumers with bad credit, having a healthier score can mean lower interest and payments.
Installment loans are also a great way to boost your credit since they touch on all the factors that will affect your credit score. This includes payment history, credit utilization, and new credit.
However, it is also important to know that just as with any loan, delinquencies on an installment loan can hurt your credit.
When it comes to installment loans, the pros will typically outweigh the cons for most consumers.
Where to Find Installment Loans
You can use your personal loan for anything from remodeling your home or paying off that credit card bill once and for all.
To find the best rates, be sure to shop and compare online. Note that when you do apply to receive a loan, a hard credit inquiry will be conducted. However, if you inquire about multiple installment loans in a 14-day period, all of the hard inquiries placed on your credit report will count as just 1 inquiry.
Be sure to also stop by your local bank or credit union to see if they have any low-interest installment loans available. It can be hard to find the best interest rate, so be sure to check all providers in your area. and online.
If a lender is ready to issue you a loan, ask them to keep the pre-qualification valid until you meet with other lenders to check rates.
All in all, installment loans are a great source of cash for those that are in a financial bind with a less than ideal credit score. If you are in need of cash quickly, CrediReady can help. Our nationwide team can match you with a personal loan that fits your exact needs. If you haven’t already, take a moment to fill out our free no obligation personal loan inquiry form today!