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What Is An Installment Loan?

An installment loan allows you to borrow a sum of money which you can bay pack over a period of time. It’s ideal for big-ticket purchases, but people get them for a variety of reasons – installment loans are flexible in terms of what you use the money for.

What Are The Benefits Of Installment Loans? 

Installment loans usually have lower interest rates than credit cards, and often much lower than payday loans. The ability to pay back the loan over time rather than as one lump sum is another attractive quality of installment loans.

Top Reasons People Get An Unsecured Personal Loan

Keep in mind that the process of applying for an installment loan varies from lender to lender, but they generally follow this basic procedure:

• Collect personal identification and financial documents, such as social security number and proof of income.
• For prequalification, run a soft credit check – this won’t affect your credit score.
• Shop around and compare rates and terms from different lenders.
• Once you apply, run a hard credit check and verify your information.
• Obtain a decision on the loan. If you’re approved, you’ll normally get the funds fast – sometimes the next business day.

What Can I Use An Installment Loan For?

As we’ve mentioned before, installment loans are versatile in what they can be used for. Installment loans are essentially a type of personal loan, which can be used for a variety of purchases, including:

• Vehicles
• Real estate
• Debt consolidation
• Wedding costs
• Home renovation
• Emergency medical expenses

Types Of Installment Loans

Installments loans are simply loans that can be paid over a period of time. They come in a few different varieties depending on the nature of the purchase.

Personal Loans

A personal loan is straight-forward. It’s simply a lump-sum loan payment which is unsecured. This money can be used for whatever purpose you like.

Mortgage

A mortgage is a specialized secured loan which is used for the purchase of property, such as a house. The house serves as the collateral for the loan, making it secured. The amount of the loan is paid back over time, typically over several years (15-30).

Car Loans

Another type of secured installment loan, a car loan is used to buy vehicles. It’s usually paid off on a monthly basis.

How To Find The Best Installment Loan Rates

When you’re shopping around for an installment loan, you want to make sure you get the best interest rate. The type of rate you get will depend greatly on a few factors related to your credit and financial situation.

Here are a few tips to keep in mind during your search:

Check your credit report. You want to ensure there aren’t any errors. Late payments in particular could negatively affect your score.

Try to maintain a good credit score. Build your credit score by having a good amount of credit for a long time, paying on time, and having a good debt-to-income ratio.

Check out repayment terms. Choosing a shorter term will increase your monthly payment but will likely result in a lower interest rate. This is a good option if you can’t get a good interest rate because of your credit score.

Why Loans SOS?

Loans SOS is here to help you make the right financial decisions for your situation. We have the knowledge, experience, and training to ensure you make the right choice every time. Contact us today to find out how we can help!

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