Installment loans are not only available to those with spotless credit. Maybe you have bad credit and have been cash-strapped in the past and had to resort to using payday loans. The truth is that there are loans for people with "bad credit" that allow you to make regular payments. Here is what you need to know about getting installment loans even if your credit is challenged.
If you thought that installment loans were only available to people with spotless credit, you're in for a surprise. Maybe you have bad credit and have been cash-strapped in the past, finding that you had to resort to using payday loans, which are convenient but costly. The truth is that there are loans for people with "bad credit" that allow you to make regular payments to pay off your balance. Here is what you need to know about getting installment loans even if your credit is challenged.
What Are Installment Loans?
Installment loans are more common than you realize. For example, an auto loan is classified as an installment loan. This type of loan provides you with a lump sum that you are borrowing and then gives you certain terms for repayment. Unlike payday loans, installment loans allow you to pay back your loan over a period of time instead of in one lump sum. Installment loans can range from just a few hundred dollars to several thousand depending on your needs, your credit history, and your lender.
Benefits of Installment Loans
If you've ever taken out a title or payday loan, you know that these financing arrangements can be stressful.
While it's true that you may still have a high-interest rate if you have bad credit and no guarantor (or co-signer), the payments on installment loans can be much more affordable. Installment loans provide you with a longer loan payback period, which could provide you with lower periodic payments than other bad credit loan options. Some lenders will allow you to pay back an installment loan as quickly as you like without penalty. If you have the money to repay your loan, you are welcome to do so early, or you can maintain your normal payment schedule.
Requirements for Installment Loans If You Have "Bad Credit"
Let's assume that you have some credit challenges and can’t qualify for most traditional loans. Instead of borrowing from payday lenders, an installment loan that is geared towards people with bad credit is a better option. The best part is that the qualifications for these loans are much simpler than a conventional bank loan. A few of the requirements might include:
- Must be at least 18 years old
- Must be a permanent U.S. resident
- Must have steady, verifiable monthly income
- Must have an open bank account in good standing
- Must have a valid email address and working phone number
The best news is that installment loans for poor credit applicants don't require a lot of red tape. If you meet the requirements, you may be able to have your loan processed the same day and your funds deposited within one business day.
Finding sources to borrow money when you have bad credit can be a challenge. Fortunately, installment loans are now available to many borrowers who may otherwise not be able to qualify for loans outside of risky payday and title loans.