An installment loan is among the most common types of credit that people apply for nowadays. It’s a loan type that allows you to borrow money that you need to pay back with fixed installment payments over a specified period. You can pay the loan off monthly, quarterly, semi-annually, or annually.
Installment loans are the best loan type if you need funds for emergencies or unexpected expenses. You can visit sites like Personal Money Network if you want to learn more about installment loans or read this article to know the things you need to know before you take out installment loans online.
Common Types of Installment Loans Online
There are different types of installment loans that you can avail online. Typically, the differences between them are based on what purpose you’ll use the money for and the loan terms.
Auto Loans
A car loan is another type of installment loan that you can get from car dealerships, banks, and credit unions. This type of installment loan has interest rates ranging from 3 to 15 percent, depending on the lender.
Mortgages
If you’re going to buy a house, you can cover the amount of your purchase by getting a mortgage. It’s a type of installment loan that has a 15- to 30-year loan term, depending on the lender. Many home loans also allow you to pick for an adjustable or fixed interest rate.
Personal Loans
You can use personal loans for different purposes, but many people use it for debt consolidation. Credit unions, banks, and online lenders offer this type of installment loan.
Interest rates of personal loans vary from 6 to 35 percent, with loan terms from 2 to 5 years (repaid in monthly installments). It’s advisable to compare the offerings of various lenders so that you can choose what’s the best personal loan for you.
Advantages of Installment Loans
Installment loans are popular because of the advantages it holds compared to most types of loans. Here are the reasons why this type of loan is right for you.
Straightforward Application Process
Applying for an installment loan online is pretty simple. As long as you have a tablet, laptop, smartphone, and an internet connection, you can avail this type of loan wherever you are.
You simply need to read the terms and conditions carefully and fill out an online application form with your personal information and then wait for your loan application to get approved.
The approval of your loan application is also fast. Within just 24 hours or the next business day, the funds will already be deposited into your account. An online installment loan is the best type of loan to cover sudden and urgent expenses.
You Can Get It Even with a Poor Credit Rating
Another advantage of online installment loans is that it has lenient qualification requirements. Even when you don’t have an established credit history or have a poor credit score, some lenders will still approve your online installment loan application.
Flexible Repayment Terms
Most lenders that offer installment loans online have flexible repayment terms. In fact, you can even pick your repayment schedule. For example, you can opt to have your installment payments monthly, quarterly, semi-annually, or yearly.
There’s also a feature of this type of loan that ensures that you can repay the full amount of the loan at the end of its lifespan. For instance, your lender will only lend you a loan amount that matches the volume/frequency of your income. Depending on the lender, you can also avail low-interest rate offers so that you won’t find it difficult to pay the loan off.
It Offers Higher Loan Amounts
If you need to borrow a large amount of cash, it’s high time to take out an online installment loan. Many lenders who offer this type of loan are willing to lend you significant loan amounts for you to cover a costly purchase.
An online installment loan that comes with a high loan amount is also an excellent choice if you want to avoid taking out multiple loans simultaneously.
You Have the Option to Rollover the Loan
While it’s not advisable to roll over a loan, there are financial circumstances in life that you just can’t avoid. Maybe you have used the money intended to repay the loan for a more important matter (say, rent payment), and you have no other choice but to roll over the loan.
With online installment loans, there’s a rollover option in such a case you can’t pay the loan on schedule. Don’t worry, though, because it also comes with reasonable penalties that won’t hurt your budget.
Takeaway
Online installment loans are perfect for borrowers who want instant cash to cover immediate expenses. You can avail it to buy a house, purchase a car, pay for tuition fees, or to consolidate debt. This type of loan also has a simple application process, lenient qualification requirements, and manageable repayment terms.