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Installment Loans for Bad Credit

Installment loans are personal or commercial loans that borrowers must repay with regularly scheduled payments over a stipulated time frame. Mortgages, auto loans, and personal loans are examples of installment loans. A loan that has to be repaid on a set schedule is an installment loan.

The major advantage of getting an installment loan is the flexible terms of repayment. Most installment lenders offer loan applicants the opportunity to decide on a loan amount and a loan term that is most suitable for them.

When searching for a bad credit loan option, It is important to have adequate information about terms and rates before making a final decision. Below are the important details about Installment loans for bad credit that you should be aware of before deciding to apply.

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Written by: Big Piggyy

Rating

3.3/5

Loan Term

14 days -60 months

Est. APR

% 390 - 445

Loan Amount

$100 - 15,000

Rating

3.3/5

Loan Term

14 days - 60 months

Est. APR

% 173.81 - 495.36

Loan Amount

$50 - $10,000

Rating

3.9/5

Loan Term

12 - 60 months

Est. APR

% 46.93

Loan Amount

$100 - $15,000

Rating

4.3/5

Loan Term

90 -150 days

Est. APR

% 26

Loan Amount

$500 - $850

Rating

4.8/5

Loan Term

6 - 60 months

Est. APR

% 19.99 - 36.99

Loan Amount

$500 - $15,000

What are Installment Loans for bad credit?

Installment loans for bad credit are loans specifically designed for people with bad credit or no credit at all. Several Lenders offer small loans with the option of spreading the payment over a long period to people with poor credit history.

 

To get larger amounts, however, you may have to use collateral. Lenders allow you to leverage the value of your collateral for loans. Collateral such as real estate properties reduces the risk for lenders because it serves as a guarantee that you’ll repay the loan. Keep in mind that you risk losing your property if you are unable to repay your loan in due time. 

 

You may find the interest rate on installment loans for bad credit high. Keep in mind that while rates differ from lender to lender, the interest rates for bad credit installment loans are often higher than for installment loans for people with good credit. The interest rates on unsecured loans are even much higher than those on secured loans. Secured loans are loans that involve collateral while unsecured loans are loans that do not involve collateral. Lenders charge such high rates as a means to mitigate risks and encourage repayment.

 

Installment loans allow borrowers to spread payment over 6 months, 12 months, and sometimes as long as 60 months. There is no pressure on borrowers to repay the entire loan at once as in other types of loans. 

 

Features of Installment Loans for Bad Credit

A bad credit installment loan has the same features as any installment loan. 

 

Loan amount: Loan amounts for installment loans often range from a few hundred to a few thousand.

 

Repayment scheduled: This involves a series of scheduled payments of the same amount which will be paid over some time.

 

Interest rates: Interest rates for bad credit installment loans could be fixed or variable. Fixed rates are interest rates that remain the same throughout the loan term while variable rates are interest rates that change over time. The type of interest rate on a loan depends on the lender.

 

What are the Eligibility Criteria to Get an Installment Loan?

To apply for an installment loan you must meet all the eligibility requirements. They include;

  • Your full name 
  • Your age 
  • Proof of identity 
  • A steady income 
  • No recent record of bankruptcy.
  • An active checking account to receive funds.
  • Valid phone number and email address for verification processes.

 

Some lenders have a platform where you can check if you are eligible for a loan without having to do a credit inquiry. You can find out your rates and decide if they are favorable.

 

How do Repayments Work?

The repayment of installment loans is scheduled and regular. The borrower is expected to repay an equal monthly payment. There is a set amount to be paid every month and the amount does not change. For instance, if you have a loan term of 12 months, you will be required to pay a set amount, say $200, every month till the end of your loan term. This makes it easier to plan payments. Each monthly repayment is a portion of the principal amount borrowed plus the interest on the loan.

You can also pay off your entire loan at any point within your loan term. You save interest charges when you pay off your loan before the end of the stipulated loan term.

 

What are the Pros and Cons of Installment Loans for Bad Credit?

Installment loans are perfect to relieve financial stress when you have bad credit.  There are numerous advantages to getting an installment loan but there are also disadvantages.

 

Pros 

  • Can be used to finance major purchases.
  • The scheduled repayment amount does not change all through the loan term.
  • You can save interest charges by paying off your loan before the end of the loan term.

 

Cons 

  • High-interest rates.
  • High fees
  • Payment default may result in the forfeiture of the collateral used to secure the loan.
  • Repayments that stretch over very long terms may become tiring and bothersome.

 

How to Apply for Installment Loans for Bad Credit

Some credit unions and local banks accept applications for bad credit installment loans. 

Apart from these traditional financial institutions, you can also apply for installment loans from online Lenders. Online Lenders are a much easier and faster means of getting an installment loan. Although different online Lenders have unique features, the application process generally involves the following steps;

  • Complete an online application form: Carefully complete the online application form. Take your time to fill in the right information as it is required. Choose the loan amount and loan term that is most suitable for you.
  • Get a decision: Get a decision and receive the loan offer. You will be required to sign the loan agreement before your loan is approved. 
  • Receive funds: After your application has been approved, you will receive the funds in your live checking account within a few hours or a few days, depending on the lender.

 

Conclusion

An installment loan can be used to settle major expenses and make big purchases. The flexible terms and favorable rates also make repayment easier. Make sure to make repayments at the right time to avoid incurring more debts which can further damage your credit score. Before applying for an installment loan, compare the rate and terms of different lenders and then choose the most convenient.

Big Piggyy

"Show me the MONEY!!!" – Jerry Maguire

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