The cost of an installment loan
The cost usually comprises of installment charges, as well as other applicable fees. The agreement between you and the lender should explain the terms of the contract, as well as the charges and fees.
In addition, U.S. law requires that the lender put all charges in terms of dollars and factor in APR (Annual Percentage Rates).
Qualification for bad credit installment loans
Installment loans are not applicable in all states. However, if it is applicable in your home state, the lender will factor in your credit history and income level to determine your qualifications and the limits that you can borrow. The state laws can also determine the maximum and minimum amounts that you can borrow.
When applying, you complete a loan application form and submit it with extra information like verifying your income, checking bank account information and your identity.
Getting installment loans bad credit
Avoiding short-term lenders
Credit unions and banks may refuse to lend money to many borrowers, resulting in the next solution – short-term lenders. However, there is no difference between short-term installment loans and payday loans.
You can receive your money instantly, which is nice – but this often comes at a heavy price because of the frequency of due payment days (only a few days apart) and the high rates.
Tough and slow banks
These are, more often than not, the first source of installment loans. They offer them for many users, including car loans, student loans, mortgage, and personal loans.
A disadvantage with banks is particularly in giving unsecured loans, it gets even stricter; banks keep very rigorous credit requirements to approve borrowers. If you have marginal credit, you will need a trustworthy co-signer to help in your application.
The other problem is the long process of loan applications. It takes even weeks or months before you get the finances, and that is only if you qualify in the first place. For this reason, they may not be a viable option when you are seeking an instant solution.
Installment loans are a good option to have, but bad credit may hinder you from getting the service. For this reason, various online lenders have come up to provide the service, and you can seek the loans as long as you confirm that you have a steady income and bank account.