Are Installment Loans for Bad Credit Worth Considering?

by Mclaren V. Stories of latest Business Trends

An installment loan is a type of loan that allows you to borrow money in a lump sum and repay along with interest in fixed installments. Personal loans, auto loans, mortgages are a few examples of installment loans. It is easy to get an installment loan if you have a good credit history, credit score, and income.

Even if you have an imperfect credit score, you can still get a loan as some lenders in the market offer installment loans for bad credit. The interest rates could be slightly higher but are still worth considering compared to a payday loan that has much higher APRs. According to the Consumer Financial Protection Bureau, 80% of payday loans don’t get paid back in two weeks, and when you don’t pay on time, the interest rate soars to 521% and continues rising every time you can’t repay the debt.

Installment Loan for Bad Credit

Installment loan online for bad credit is designed for those with lower credit scores, or imperfect or no credit history. You can get this loan from a bank, NBFC (Non-Banking Financial Company), or a credit union. Of all these, getting an installment loan from NBFC can be the best option because you can get an unsecured loan. Moreover, the loan approval is almost instant, and you can receive money in your account quickly.

Features of bad credit installment loans

Bad credit installment loans online work similar to installment loans. Here are the features:

The loan amount ranges from a few hundred to several thousand dollars.
Repayments can be made in a series of payments ranging from a few months to several years.
The interest rate could be fixed or variable. If it is a fixed rate, your EMI remains the same throughout the life of the loan. If it is variable, it fluctuates over time depending on the financial index.

Though interest rates vary from lender to lender, bad credit installment loans have:

Higher interest rate: If your credit score is low, lenders may charge you a higher interest rate compared to those borrowers with a good credit score. Moreover, the lender may even customize a few loan terms based on your credit history and various other factors.

Installment Loans for Bad Credit: Eligibility

The eligibility criteria vary from one lender to the other. However, the usual criteria are mentioned below:

Your full name
Your Proof of identity
Your Social Security number
Details about your income

The lender will now check whether you qualify for the loan through a hard credit enquiry. When looking for a lender, research and find a lender that provides information about your eligibility with only a soft credit inquiry. Because many inquiries may hurt your credit score, and you may not be able to get any loan in the future.

If you are looking for a genuine and reputable lender to apply for an installment loan online, choose Advance Financial. You can apply for a loan of up to $3,000 (may vary depending on the state you live in) and get cash on the same day. On the contrary, beware of lenders that offer payday loans in the name of an installment loan and push you into a cycle of debt.