Do you need money to invest in your career, cover unexpected expenses such as hospital bills, or pay for a house? An online installment loan is among the best loan types that you can get to back up such expenses.
Installment loans may sound like an intimidating or unfamiliar term, but they are the most common loans today, and, most probably, you have already applied for this loan type before. Car loans, personal loans, home loans, student loans fall under the umbrella term “installment loans.”
So, if you’re planning to borrow some cash to fund for whatever goal or purchase you have in mind, it’s practical to get an installment loan. Here’s what you should know on installment loans online.
Installment Loans Online: Defined
It’s easy to understand what an installment loan is solely by its name. The term “installment” refers to the scheduled installment payments that you have to pay during the loan’s lifespan. Payment schedules can vary depending on the lender. It can be weekly, monthly, or quarterly payments.
There are also two types of interest rates for installment loans: variable interest rates and fixed interest rates. The former means that interest rates can go up or down depending on factors such as market conditions, and the latter means that interest rates remain the same throughout the period of the loan.
Borrowers can apply for this type of loan at credit unions, banks, or through online lenders. It’s advisable to compare different lenders to get an installment loan that has an advantageous loan term and interest rate.
Common Purposes of Installment Loans
For sure, there’s a purpose why you want to take out an installment loan. Many folks apply for this loan type to pay for home purchase, car purchase, educational expenses, and medical bills.
Cover Sudden Expenses
Unfortunate circumstances sometimes happen when you’re not financially prepared for it. An example of it is hospitalization. In such a case, you can borrow cash through an installment loan to pay for your hospital bills. Installment loans have terms lasting 12 months or more, and you don’t need collateral for this loan type.
Purchase a House
Unless you have a great deal of money, getting an installment loan to purchase a house is crucial. A mortgage is a type of installment loan that has a longer loan term that lasts up to 30 years. Plus, you can repay the loan amount plus interest rate on installment payments, so it’s not burdensome on your part.
Buy a Car
If you need to buy a car, you can take out a car loan to pay for its upfront costs. Some car loans offer longer loan terms ranging from 12 to 96 months. The longer the loan term, the lower its monthly payments. But, you should consider it carefully because such loans also come with higher interest rates.
Pay for Educational Expenses
A student loan is another type of installment loan. This loan type is used to cover education expenses. You can get it from the federal government, banks, or online lenders.
Advantages of Online Installment Loans
Online installment loans are a great option if you need to borrow some cash. Here are the advantages of this type of loan.
Easy Application Process
Since you’re applying online, you don’t need to fall in a long line or wait for a week or more to get an installment loan. You just have to fill out an online application and submit it for approval. It will only take minutes or a day before you get notified if your request is accepted or not.
Lenient Qualification Requirements
Some online lenders don’t check your credit profile when you apply for an online installment loan. That’s why it’s the best option for people with poor credit ratings.
When you apply for an online installment loan, you only have to be of legal age, a permanent resident of a certain city where the loan is offered, have a steady source of income, have an active bank account, etc.
Manageable Repayment Structure
Installment loan repayments are structured on an installment basis. It only depends on your lender whether you have to repay the principal loan amount and interest rate weekly, monthly, or quarterly.
This loan repayment structure gives you more convenience and flexibility to budget your money, and it doesn’t put too much financial strain on your part.
Online Lenders Often Offer Higher Loan Amounts
Yes, it’s true. Some lenders of online installment loans can also lend you a higher amount of loan if you have the ability to repay it. This feature allows you to pay for costlier expenses or purchases. Another advantage of this feature is that you don’t need to get multiple loans to fund such expenses.
Takeaway
Get an installment if you have to pay for a costly purchase or cover sudden expenses. Applying for this loan type is no hassle, and it also has a flexible repayment structure and lenient qualification requirements.
