A woman in a blue top is thinking about installment loans

What are Installment Loans?

Milad Hassibi June 10, 2018

Installment loans are a great way to get cash quickly if you’re in a financial hard spot. Essentially, an installment loan is a loan that you pay back in a set amount per month for the duration of the 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.

What Types of Installment Loan Are There?

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. Some examples of installment loans can include auto loans, student loans, and even mortgages. 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 can know exactly how much you need to repay on aA man is handing over cash to an approved client on paper 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.

Installment loans can be used for anything depending on the type of loan. If you get just an unsecured installment 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.

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.

Before you get an installment loan, its best to check your credit score. Although most 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.

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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, however, the pros will typically outweigh the cons for most consumers.

Final Note

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!

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