As most us know, there are many types of loans available from a variety of lenders. Both short-term and long-term loans are available, while different types of loans are recommended for different financial situations.
For instance, a mortgage is one of the largest loans available while a payday loan is typically the smallest loan you can find.
One type of loan that many borrowers look for is an installment loan. In fact, most people that secure a loan typically find it is an installment loan. It’s loan that is available on many types of loans, including:
- Auto loans
- Personal loans
- Payday loans
What is an Installment Loan ?
As the name suggests, an installment loan is a type of loan that is repaid in regular installments. Many types of installment loans are available, from short-term loans like payday loan to long-term loans like a mortgage or auto loan. Some installment loans are repaid over weeks or months, while others are repaid over several years.
How Does an Installment Loan Work ?
Installment loans are relatively straight-forward:
- Start by researching installment loan providers – we can help you find suitable installment loan providers.
- Complete the online form to see what loans you can match with.
- Qualify for up to $2500
- Check the rates of each lender and choose which one you like most
- Get connected to the lender and apply directly for the loan
- Agree the terms of the loan including interest rates, loan duration etc.
- Receive the loan and begin repaying in installments according to the loan terms
Are there Any Requirements for an Installment Loan ?
It depends on the type of installment loan. For instance, a mortgage has many strict requirements due to the higher risk of the loan for a lender.
To qualify for smaller installment loans and payday installment loans you’ll need the following:
- Be at least 18 years old
- Have a checking account that accepts digital transfers
- Be a citizen or resident of the United States
- Have a regular source of income
- Personal info such as email account, home address, phone number (usually for verification purposes)
What Rates are Available for an Installment Loan ?
In most cases an installment loan is available with a fixed-rate. This is great because it means you repay the same amount in each installment with no changes to interest rate. Interest does no increase over time with fixed rate installment loans, remaining the same from the time of borrowing.
There is a notable exception for this, however. Mortgages are a type of installment loan that often don’t have fixed rates. While fixed rate mortgages are available, they often come with variable interest rates.
What are Repayment Schedules Like for an Installment Loan ?
This varies from loan to loan. The terms of each installment loan differ, so the number of installments can range from just a few weeks to several weeks or even years. For example:
- Payday installment loans are typically repaid over 3-6 months
- Personal installment loans are typically repaid over 6-12 months
- Larger installment loans can take several years to repay
Are there Any Additional Charges for an Installment Loan ?
Yes and no, depending on the terms of the loan and the type of loan you borrow. For example, certain installment loans charge an extra fee at the beginning of the loan process, usually in the first installment.
Should you miss paying an installment there may also be a late fee charged. Other installment loans may charge you for early repayment, which covers some of the lost interest from fewer repayment installments.
Is Collateral Required for an Installment Loan ?
The need for collateral depends on the type of installment loan you borrow. For example, a mortgage or an auto installment loan may require a form of collateral. This is basically when you offer some of value – like a property of vehicle – as collateral for the loan should you stop repaying the installments.
Not all installment loans need collateral though, with the most notable being a payday loan or personal loan.
These types of installment loans determine the suitability of the borrower through different means. For instance, personal loans often require a credit check, while payday loans need the borrow to have a source of income.
There are also installment loans that have no credit check or teletrack and don’t require collateral.