If you have a less than “Fair” credit rating (under 601 by Experian standards), you are not alone. Around 1/3 of all U.S. credit scores are in that “Bad” to “Poor” credit score category.
And yet, people with poor credit still need to take out short-term loans for a variety of reasons, from buying a new car to paying for college expenses to funding emergency home repairs.
But with banks so tight with their funds, where can you qualify for a loan despite having some bumps and trouble spots in your credit history?
It’s Easy to Find Poor Credit Installment Loans Online
A quick Google search will reveal there are a host of lenders offering poor credit installment loans online. And it is very fast and easy for the great majority of applicants to qualify for this kind of loan.
Installment loans, also called “personal loans,” will generally give you a superior interest rate and lower fees than with your typical payday loan. Often, their rates are less than on many credit cards. It’s true that you pay more on a percentage basis than with most bank loans, but installment loans beat bank loans in other categories, including the following:
- Your chances of approval are much higher.
- You don’t have to wait days to get an answer but will know almost instantly if you are approved for the loan.
- The application forms are short and simple, asking for only basic financial and personal information and taking but a few minutes to fill out.
- The cash can normally be credited directly to your bank account within a single business day.
- You get more time to repay than with a payday loan, but a shorter repayment period than with most bank loans. This means you don’t have to repay in one lump sum but yet will not be burdened with payments for long periods of time.
- You can apply from the privacy of your own home, online, and not risk being asked embarrassing questions in a loan interview.
Those are only a few of the advantages online installment loans offer. Next we’ll look at a few tips on how to be a wise borrower of this type of loan.
Key Principles for Borrowers of Online Installment Loans
Some people shy away from online loans, but the reality is that the Internet is now a mainstream method of securing fast, no-collateral loans. And as long as your’re careful to choose a reputable lender, it’s as safe as online banking or online credit/debit card transactions (which are routine in the modern world).
Here are a few important principles to keep in mind when taking out a poor credit installment loans online:
- Be sure your monthly payment is not over 10% of your monthly income.
- Sign up for automatic withdrawal to ensure your payments on always on time.
- Comparison shop on rates and terms.
- Look for a no-credit check lender.
When handled responsibly, online no-collateral installment loans are a helpful tool for poor credit borrowers.