An installment loan is a loan that allows you to borrow a fixed sum that is to be paid back in equated monthly installments (EMIs). Some of the examples of installment loans are auto loans, personal loans, and mortgage loans. You can get installment loans from a few lenders even if you have bad credit. Payments are calculated monthly and you must pay back within the agreed schedule. If you have good credit, you could easily qualify for a loan with a better interest rate. In case your credit score is low, you could still get an installment loan approved but with a high-interest rate and expensive fees.
The common features of installment loans with bad credit
Installment loans with bad credit will function similar to any kind of an installment loan. As different lenders have different terms, It is better to check a few things with respect to an installment loan before applying for it.
● Loan amount – It ranges from a few hundred dollars to several thousand dollars.
● Collateral – Installment loans can be either secured or unsecured. If the lender believes that you are financially irresponsible, he may ask you to provide any form of collateral.
● Annual Percentage Rate (APR) – The annual percentage rate is typically wide-ranging. It depends on the lender you choose. On average, APRs can go up to 100%. The area of your residence is one of the key factors considered by the lender to determine the total cost.
● Repayment schedule – Repayment schedule ranges from a few months to several years. You must pay back the borrowed money in a series of payments for a timeline agreed by you and the lender.
● Interest rates – The interest rates differ from one lender to another but if you have low credit, then you could be charged with a higher interest rate. If you have strong credit, the interest rate could be lower. The interest rate can be both fixed and variable. Fixed interest rate implies that the interest rates will be the same throughout the lifetime of the loan. Variable interest rates are linked to the financial index and so the interest rates will keep fluctuating over time.
Be a trustworthy borrower and pay back the borrowed amount on time. It is to be noted that your loan repayment history will be reported to the credit bureaus. If you pay back on time, you have a great chance to rebuild your credit.
Nowadays, even if you have bad credit, several lenders can provide you with installment loans online. But, be careful as some lenders disguise and offer payday loans instead of installment loans. Before applying for an installment loan with bad credit, do your research and compare the potential lenders to figure out the one that best suits your requirements. Always check their loan terms, interest rates, and repayment schedule to ensure it is favorable for you. It is better to choose reputable lenders like Advance Financial so that you don’t land into any problems. The company offers flexible loans with same day funding.