When it comes to reputable online installment loans, lots of questions arise. Some people claim that installment loans invoke lack of trustworthiness. Nevertheless, nowadays installment loans are becoming more and more popular. Financial experts expect installment loans to be the new payday loans. Where lays the reason for its popularity? What is an installment loan itself? And the main question – how to qualify for an installment loan? We prepared the answers to all these questions!
What Is Installment Loan?
An installment loan is a kind of borrowing when a borrower is supposed to pay off the debt with the help of fixed payments or installments paid monthly. Still, it differs from the loans that include a minimum payment. So, the loan that includes a minimum payment doesn’t always have to be an installment loan. This kind of borrowing is a short-term and monthly installment loans are really popular among Americans.
Installment loans have some benefits over other types of loans. This kind of borrowing includes poor credit installment loans. It means that it’s possible to take a loan even if you have a bad credit. Furthermore, installment loans are a perfect variant for those borrowers, who can’t afford to pay off a debt with a lump sum. Find out more pros and cons of this lending product here.
Nevertheless, you must always remember about a high interest rate and additional payments such as insurance payments and fees. Mostly, these payments aren’t publicized. That’s the way lenders make money and borrowers “voluntarily” allow them to cheat.
That’s the basic information you need to know about installment loans. If you don’t know, where to get installment loans, check out this article.
How to Qualify for an Installment Loan?
While installment loans may seem easy to get, you should meet particular requirements anyway. Actually, some potential recipients don’t expect these requirements to be that easy. Still, there exist cases when lenders deny loans for some reasons.
Requirement #1. Age. You must reach 25 years to be able to apply for an installment loan. By the way, a payday loan is given to people, who reached 18 years old.
Requirement #2. A bank account. You must obtain a bank account where will be delivered direct deposits. This requirement works for an online installment loan as most of the installment loans are taken online.
Requirement #3. A minimum income. Your minimum income must comprise at least $1300 per month. This requirement is reasonable while your potential lender must be sure that you will able to pay your debt off. Payday loan in its turn supposes borrower to have at least $800 and is a good alternative if your income is under $1300.
Requirement #4. A proof of employment. A proof of employment is the other proof that supports your ability to pay the debt off. It’s enough to provide your potential lender with a recent paycheck stub or letter from your employer.
If you meet all the aforementioned requirements, then you will more likely get an installment loan. Otherwise, you can face some problems.
An installment loan is a kind of borrowing that allows you to prolong your payments by decreasing them. It’s one of the most profitable types of loans as you only for the time you use the loan. Furthermore, you can regulate payments independently – pay off a debt quicker by bigger installments or prolong it with smaller payments. This option is pretty attractive and makes an installment loan to be flexible.
Nevertheless, you must always be aware of tricky pitfalls that accompany installment loans. To avoid them and make benefits from installment loans it’s essential to familiarize with its peculiarities beforehand and carefully read its terms.