When you have a need for fast cash but wish to avoid the quick repayment requirements of payday loans, online installment loans may be the answer. When emergency expenses arise, and you cannot wait to save money or get a standard bank loan fast enough, an online installment loan may be able to get you through a “rough spot” when other options are unavailable or impractical.
How Do Online Installment Loans Work?
As the name implies, the definitive feature of installment loans is that you can pay off your balance a little at a time rather than in one lump sum. The payments will be scheduled at regular intervals, perhaps every two weeks or every month, and the term may last from just a few months up to a few years.
Loan amounts are normally restricted to a few hundred to several thousand dollars, but this can vary from lender to lender and based on your income level. The amount you can borrow sometimes also varies based on which state you live in.
To secure an installment loan online, you normally need to provide basic information such as your social security number, your source/amount of income, and banking information. But the online application is short and simple, and you will likely be informed instantaneously on whether or not you are approved.
Also note that online installment loans generally do not require any collateral.
Choosing a Lender for Your Online Installment Loan
You will find there are a plethora of possible lenders for online installment loans, some of them reputable, some of them not. You will also find a wide difference in the terms of the loans, which makes it crucial that you take the time to read the terms and conditions.
The most obvious factor to look for is the interest rate. Some online lenders have extremely exorbitant APRs, but others have reasonable, affordable rates. Your credit history may affect the interest rate and terms you receive, but longer repayment terms also tend to increase rates.
The lender should allow you to have the cash direct-deposited into your bank account, and you should also be allowed to pay back the loan online and opt for automatic withdrawal on due dates if you so choose. Some lenders will allow you to pay back via mail as well.
The best lenders will allow you to pay back the loan early without penalty and may even allow you to cancel the loan within a specified period.
Online installment loans are a viable option for those who need cash fast and need more time to repay than with a payday loan. It is important, however, to read the loan terms and compare lenders.