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Installment Loans: Everything You Need to Know

Do you have a personal cash flow problem? Small installment loans are useful when you need extra money to pay an unexpected expense, and payday isn’t as close as you need it to be. If this is your first time considering one of these loan products, you probably have questions. Continue reading to learn how these short-term loans work and how to qualify for funding.

Repayment Benefits of Installment Products

Many people assume short-term installment lending is the same as payday lending. While both of these options get you cash in hand fast, the repayment options differ. With payday loans, you’re required to pay back the loan the next time you get paid. However, that’s not always possible, especially if you’re dealing with an expensive emergency. Installment products take away the stress of repaying a large lump sum in 7-14 days. Instead, these loans are repaid a little at a time over a longer period.

Do I Need Collateral?

Personal installment loans do not require collateral. Some lenders require you to give them your banking information so payments can automatically be collected on their due dates. However, this isn’t an across-the-board requirement. It depends on the lender and how they handle the loan repayment option. Loans that don’t require collateral let you get the cash you need without using a car or other piece of property to secure the loan.

Prepayment Options

The best installment loans let you pay off your loan as early as you want. When applying for one of these loans, make sure you understand the payment schedule and what your prepayment options are. In some cases, lenders will charge a penalty for paying off the loan early. They do this to recoup as much interest on the loan as possible. Prepayment is great for you, but not for lenders, because they don’t make as much off the loan.

Be Clear on Payment Due Dates

Most short-term loans are due according to your pay schedule. The amount will either be debited from your account or you’ll be required to send in the payment to a physical location. Make sure you have money in your account the day it’s supposed to be debited to avoid additional fees from your bank such as overdraft fees.

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How to Apply for Loans

Today you can apply for most installment loans online. Each lender has different requirements for documentation. Some loans can be started and finished completely online, while others may require you to fax documentation like pay stubs and bank information. When giving out your personal banking information, make sure that the company is reputable and licensed to fund short-term loans in your state.

Credit Criteria for Installment Lending

The good news is that credit criteria for small loans isn’t as strict as applying for credit through traditional banking institutions. In some cases, the lender might pull a consumer credit report to see if you have any other short-term loans out and the payment history of those loans. If you’re looking for the best installment loans with higher approval rates, choose a lender than offers small loans under $500. This amount is easier to pay back, and you pay less in interest.

If you need a short-term loan for an emergency, contact Get Money to get cash in your bank account as fast as possible.

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