How Do I Get a Personal Installment Loan?
Have you been looking for financial assistance for a little extra cash to be able to pay for an upcoming event? Or are you dealing with an emergency or sudden crisis you have no way to pay for out of pocket?
A search online for financial help probably turned up payday loans or installment loans, and your question is probably why and how you should get one.
Personal loans like these are offered by independent brokers and finance agencies either in brick and mortar stores or online, and their aim is to help consumers who may lack the qualifications for a bank’s loan.
The Main Way Installment And Payday Loans Work
Some alternative lenders lump payday and installment loans into the same product, while others prefer that they be completely separated and referred to as different because they do have one distinct difference which is in the time and amount of payments.
A payday loan in the traditional structure is meant to be a small cash loan that’s both funded in a lump sum and meant to be paid off in a lump sum.
An online installment loan on the other hand is funded in lump sums, but they’re paid back in many payments stretching out over a period of months, and you pay off both principal and interest with those payments.
How You Get Approved For One Of These Loans
Each lender’s personal loan product will have different requirements as to how they are obtained.
That’s because these loans are primarily dictated by state authorities, although there are a few rules that the Consumer Financial Protection Bureau has set that lenders have to abide by regarding balloon payments and making sure consumers are able to cover them.
But aside from the CFPB and their warnings to consumers on installment and payday loans, it’s mostly up to the states to put in place the rules lenders follow for determining who can use them, and how much can be borrowed.
Amount of Money
Usually these loans are small dollar amounts, and while loans paid in installments will last longer or perhaps be used for larger expenses than very short-term payday loans, they aren’t meant to be ongoing forms of financing.
Most of them are offered online instead of in brick and mortar stores, though you may still find lenders who give you the option to visit them in-person.
But since they are usually online loans, you can expect to submit electronic copies of the following:
- Documents or electronic records that verify you are employed and have income that meets the threshold for the amount you want to borrow
- Information about your checking account since the lender will need to charge a withdrawal on the due dates
- Documents about regular bills or rent you pay since usually a lender will conduct an alternative credit check to see if you’re able to borrow money and repay it accordingly
What they’ll usually do first is have you fill out an installment loan estimate first before contacting you to complete the main application.
This is just to give you an idea of how much you might be able to borrow.
Once they ensure your information is correct and you meet the borrowing requirements, it’ll usually be up to about a day or more before you receive funds in your checking account.
Repaying These Loans
Usually these loans are repaid in the scheduled amounts on the due dates the lender has in their agreement.
Usually you do have the opportunity to pay off the loan before its final due date to avoid interest payments, and most states require that lenders allow this without penalty charges.
It is important to check with the lender’s terms as well as your state’s laws to be sure you won’t be hit with penalties as well as to ensure your lender accepts the form of payment you want to make with them.