Poor Credit Installment Loan | How Does It Work?
Get a poor or bad credit installment loan with instant approval. Our trusted direct lenders may be able to get you approved when other loan companies are giving you the runaround. So let's take a closer look at monthly installment loans with bad credit.
There are numerous types of loans available. An installment loan is one of such loans. It refers to the loans which are paid in installments over an agreed period of time. These payments are often scheduled yearly or monthly etc. The payment usually covers a specific portion of the debt including interest.
What Are Examples of Installment Loans?
The amount of loan, interest rate, and terms of a loan are factors that are normally considered by the borrower. Auto loans and personal loans are some examples of installment loans. These loans can be further categorized into two types:
1. Collateralized Loans
2. Non-collateralized Loans
The only installment loan that is collateralized is mortgage or auto loan. The purchased house or car is used as collateral. Voiding any of the terms of the loan agreement will allow the bank or lender to seize your asset.
On the other hand, the non-collateralized installment loan does not have any collateral. Since there is a higher risk for the lender, a non-collateral loan has a higher interest rate.
Can I Get an Installment Loan with Poor Credit?
Receiving an installment loan is not a difficult process. The borrower simply has to submit an application for the loan. The lender evaluates the financial information of the borrower before approving the loan.
The credit score of the borrower allows the lender to assess the risk. If the application is accepted, the lender presents the borrower with a few options depending on the risk.
How do I Apply for an Installment Loan?
The options have different interest rates, down payments, number of installments, and terms of the loan. Analyze each loan company and find the best fit for you. The only installment loan that may increase interest rate over time is mortgage loan. To summarize, the installment loan process is:
1. Check If You Qualify for the Installment Loan: The factors considered by the lender for an installment loan are the age, income, credit score, and employment.
2. Applying for a Loan: There are three ways to apply for a loan: online, visiting the branch, or through the phone.
Submit an application after filling out your details. This service is available at all times for your ease. There are no extra charges and the process is safe, secure, and easy.
Loan Amounts: $500 | $1000 | $2000 | $5000 | $10,000 | $50,000
Visiting the Branch
Bring all the necessary documents and discuss your loan options with the branch representative. Discuss the loan process and figure out the details.
Through the Phone
You attain enough information over the phone for the loan.
Advantages Of Installment Loans
An installment loan has the following advantages.
- Compared to other loans, you can expect a stable interest rate on an installment loan. Since the interest rates are fixed, you do not have to worry about the interest rates increasing.
- A long-term installment loan has smaller monthly payments that are easier to meet. By coordinating with your lender, it is possible to make a payment schedule that is suitable for you. For example, you can opt for a long-term loan that will be easier to pay off.
- You can also opt for a short-term loan that will clear all your debts earlier.
- Unlike a payday loan, you do not have to wait for a long period of time to know whether your loan has been approved or not.
Disadvantages Of an Installment Loan
There is always a negative side to all good things. Similarly, installment loans have a few aspects that are disadvantageous.
- An installment loan binds you to make payments because you are obligated to make them.
- Despite being in a tedious financial situation, you would have to pay the loan. Failure in payment of installment loan can lead to the seizure of collateral or default.
- Some lenders charge a penalty for paying the loan earlier.
- Long-term installment loans may have a periodically smaller amount to pay but they have a higher interest rate.
- A loan that is in default will have a negative impact on your credit score.
- If the market interest rate for loans decreases, your fixed interest rate will stay the same. In that case, you would be paying more than you should in order to adhere to the terms of your installment loan.
- Once you sign off and agree to the terms in an installment loan, none of the terms and aspects of the loan can be renegotiated.
Bad Credit Scores and Installment Loans with Direct Lenders
We have a large network of direct lenders that are trusted and secure. Apply today and we will attempt to get you a poor credit installment loan offer. To improve your credit score you can take out an installment loan.
This can improve your credit score and will also be beneficial to pay off the debt in monthly payments. If you may recall, paying debt on time has a higher weight in the evaluation of your credit score.
The periodic installments will have a periodic increase in your credit score. However, do not raise your expectations because the credit score has a mildly positive increase.
Can I Get Approved with a 500 Credit Score?
Even with a really bad credit score of 500, you may still be able to get approved. The online application only takes a few minutes and you will know immediately if you have been approved.
What Are the Interest Rates on Installment Loans?
There are many factors that will determine your final interest rate on an installment loan. Some of the factors include:
- Your state of residence. Where you live and your local laws have a determining factor.
- Which lender you choose or which loan company makes you a loan offer.
- If you are considered "High-Risk".
- How long you have been employed and how much money you make every month.
Tips for Loan Approval with Poor Credit Score
Getting a loan with a poor credit score is difficult. However, the task is not impossible. People with a poor credit score can still apply for an installment loan by considering the pointers mentioned below:
- Collateral - The biggest concern of a lender is the risk of approving the loan to a person with a poor credit score. Providing collateral can eliminate the risk factor entirely. If you fail to make any payment, the lender will always have the collateral. This insures the punctual debt payment of installment loan.
- Credit Union - As mentioned earlier, the only thing that a lender is concerned with is a risk. To receive approval to an installment loan with your poor credit score, you can find a credit union. A credit union decreases the risk, which may encourage the lender to approve the loan.
- Online Lenders - If the bank rejects the approval to your loan, you can always find a lender online. Search on the internet for someone that might be willing to lend money. You may also find a financial expert that can get you an installment loan.
- Short-Term Loan - The last option that can be utilized is a short-term loan. A shorter loan will have higher interest rate but a lower risk. The lender will not be afraid that you are not going to make the payment in the future.
In conclusion, a borrower with poor credit score will have to jump through some hoops to get approved for an installment loan. It can also be a useful tool to rebuild your credit score. A non-collateralized installment loan would be ideal but nearly impossible for the poor credit score holder. Suffice to say, you should be content with a collateralized installment loan that will allow you to improve the credit score.
All loan terms are between you and the lender that may offer you short term credit. We have no access to the interest rate, loan duration, payment amounts, or annual percentage rate (APR). Not all lenders are able to offer you the amount you request. Annual percentage rate may be dictated by the laws of the state where you reside. This may limit your ability to access credit. All lending decisions are made by lenders, not us. Read all terms and conditions provided by the lender prior to accepting a legally binding loan agreement.
Short term credit is not a long term financial solution. It should only be use in an emergency until a less expensive option is available. Void where prohibited.
We receive compensation from lenders for providing your information in an attempt to help you get a funded by one of these lenders. We make no guarantee you will receive the amount you request on your application or that you will receive any loan offer with specific terms. Everything on our website should be considered an advertisement that we may be compensated for.
Most of the lenders in our network do not use a typical credit check, meaning with the 3 main credit bureaus. They may review an personal loan industry specific report such as DataX or Teletrack.
Services on our website are free to use. You will not be charged to submit an application. Installment loans and payday loans should be use only as a temporary solution.
Must be 18 years old to apply and be a full time citizen of the United States.
If you have any complaints about a lender you can contact the Consumer Financial Protection Bureau (CFPB) at:
Mail a complaint
Consumer Financial Protection Bureau
PO Box 2900
Clinton, IA 52733-2900
or call: (855) 411-2372