When people have expenses come up that they weren't prepared for and find themselves short of cash, a loan can be a great option to get through difficult financial times. However, some people may feel closed off from options like personal loans or good credit cards if their financial history is less than perfect.
But don't worry — past financial mistakes don't have to mean it's impossible to get a loan now. There are even installment loans for bad credit or fair credit that one can often get from a direct lender without a credit check, making it a great option for people with fair credit (ranging from 680 to 580 or less, depending on the lender). In this article, Advance America will explain how installment loans work and help borrowers decide if they're the right choice for them.
What makes installment loans different
Installment loans are loans that are usually for a larger amount of money and are paid back in installments over time. Borrowers can get installment loans for different repayment schedules, ranging from three months to years-long repayment plans.
Compared to a personal loan or credit card, it can also be very fast and easy to get an installment loan, with some being available on the day a borrower needs them and possibly without a credit check. One might be able to get an installment loan online, depending on the state.
Is an installment loan the same as a title loan?
While an installment loan can be a great option if a borrower needs cash instantly, it's not the same thing as a title loan. An installment loan will often have lower interest and longer terms, letting a person pay back the loan in pieces rather than in one lump sum. This can make installment loans easier to repay while getting the borrower the money they need when they need it.
Because an installment loan may be available to people with lower credit ratings and allows for a more gradual repayment, it can be a great solution while people rebuild their finances and work towards achieving financial wellness. While repaying an installment loan, one should come up with an overall strategy to improve their credit and finances and they'll wind up in an even better place than they started.
Should a borrower get an installment loan?
Before getting any kind of loan, it's important to research and come up with a plan for how one is going to pay back the loan. Borrowers will want to compare lenders and make sure they're getting the best interest rate from the most trustworthy and reliable lender.
It's also important to read the fine print to know how much one is expected to pay and when payments are due and to understand what happens if a borrower doesn't pay or, in the worst case, can't pay the loan back in time.
If a borrower has a solid plan for paying back the loan, fully understands the terms, and feels that having the money now will be worth the interest a borrower pays later, an installment loan might be the right choice.
Notice: Information provided in this article is for informational purposes only. Consult an attorney or financial advisor about individual financial circumstances.
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Original Source: Advance America: Can Borrowers Secure an Installment Loan Without Great Credit?