Personal loans are often considered one of the most accessible and practical borrowing options, especially for individuals with less-than-perfect credit who need additional funds. Since traditional lenders may be reluctant to approve loans for borrowers with lower credit scores, personal installment loans often serve as a reliable way to get cash quickly.
In this guide, we’ll cover everything you need to know about online installment loans — what they are, the different types available, and how the loan process typically works across various loan products.
What Are Personal Installment Loans?
A personal installment loan is any loan that implies borrowing a lump sum and paying back in smaller increments over time, usually monthly installments or loan payments. They are usually great for covering various types of expenses since they have lower interest rates compared to credit cards and much more favorable loan terms compared to payday loans.
Installment loans are typically used to cover financial needs and emergencies, such as loss of employment, debt consolidation, vehicle repair, medical bills, and moving expenses. There are different types of installment loans, but nearly all work as typical personal loans in which lenders borrow money from loan companies and pay it back in fixed monthly payments.
It’s worth mentioning that some companies offer loans to borrowers with poor credit scores, which usually come with certain requirements and restrictions, such as more strict repayment terms, higher interest rates, and perhaps additional fees or penalties. On the other hand, making timely payments and repaying the online installment loan in time may improve the borrower’s credit score.
How Do Personal Installment Loans Work?
Personal installment loans work just like any other loan, in which the borrower applies for the loan and goes through the application process and approval, after which the loan amount is deposited into the borrower’s checking account.
This used to imply a visit to the local branch office and submission of the application and required documentation in person, but the advent of the internet paved the way for online applications and document submission, sparing borrowers the headache and time loss associated with applications at local offices.
These days, borrowers can submit a loan application online for preliminary approval, upon which the borrower still has to provide all the necessary documents for further review. Personal installment loans aren’t without their benefits; some lenders offer their products without implying a hard inquiry into your credit history, making them appealing to individuals with bad credit scores.
However, despite the marketing, the lender may reserve the right to perform a credit check with the credit bureau if they deem it necessary.
How to Find Personal Installment Loans Near You
In today’s digital age of online product comparisons and purchases, searching for a personal installment loan near you has become not only obsolete but rather inconvenient, since there’s very little reason to visit the local branch office in person when obtaining a loan.
Searching the web for a personal installment loan lender is tedious work. Not only do you have to find reputable lenders and take the time to review and compare their products, but you also need to inquire about the specifics and small-print details.
Fortunately, we can offer a better way; simply fill out an online form. Please remember to use accurate and complete information, as it improves your chances of securing the loan.
Once you fill out and submit the form, we’ll forward your application to numerous lenders in our network, and if a lender decides to offer you a loan, they’ll also provide you with their loan agreement, which details the loan amount, interest rates, and fees for you to review.
A clear advantage of this particular system lies in its approach to bringing customers closer to the necessary loan products. It’s not uncommon for several different lenders to provide you with their respective offers, allowing you to compare said offers and pick the best one.
Remember to read and understand loan terms fully before accepting them. Once the loan terms are accepted the lender will deposit the loan proceeds into your bank account.
Applying for Personal Installment Loans
Before we dive into explaining the personal installment loan application process, we’d like to take the opportunity to briefly discuss the importance of good credit when taking out a loan; even those loans that are marketed as no-credit-check loans or aimed at individuals with poor credit.
Good credit matters because it helps establish your creditworthiness with major financial institutions and serves as an eligibility requirement for securing a loan. In other words, the lenders will decide whether or not to grant you the loan based on your credit score level after they have performed a hard credit inquiry.
Factors such as interest rates, annual percentage rates, and repayment terms are also determined by your credit score, with the best conditions reserved for those with excellent credit scores.
Good credit reports are important, and they apply to no-credit or bad-credit products as well. Though these loan products don’t rely on credit reports to establish eligibility, the lenders will use your credit score to determine the appropriate interest rates, APRs, and other terms and conditions of loan and loan agreement.
It pays to improve your credit score by removing inconsistencies and inaccurate data from your credit report before applying for an installment loan, which will effectively lower your interest rates and APRs. Regardless of how marginal the improvement in your credit score is, it’s still viable and worthwhile in the long run.
Now that we’ve discussed the importance of credit score when securing the loan allow us to take you through actionable steps:
Application
As discussed above, regardless of whether you are applying for an unsecured loan or a secured loan (such as lines of credit or auto loan) it pays to know your credit score because most online lenders need to know this information.
Additionally, most online installment loan lenders allow you to pre-apply by filling out an inquiry from. The pre-application process takes only a few minutes to complete, and you’ll need to know things such as your FICO score. You’ll also be required to provide basic information about yourself, like your name and phone number.
Provide the Necessary Documents
To verify your eligibility, lenders will typically ask for some or all of the following documents:
- Government-Issued ID: This can include a state ID, driver’s license, passport, or any official government-issued identification. Your Social Security number may also be required.
- Proof of Residency: Any document that shows your name and current address, such as a utility bill or lease agreement, is generally acceptable.
- Proof of Income: Lenders may request documents that demonstrate your ability to repay the loan, including recent bank statements, tax returns, pension statements, or pay stubs.
- Loan-Specific Documents: For secured loans like car title loans, additional paperwork related to collateral—such as vehicle titles or property deeds—may be necessary.
You’ll need to provide these documents upon request from the lender’s representative. After reviewing your documentation and approving your application, the lender will present a loan offer based on the information provided.
Please note, our platform connects you to multiple lenders but is not a lender itself. Loan offers and requirements vary depending on the lender and your credit profile.
Get Your Loan
Once you’re satisfied with the loan amount and terms, signing the agreement is a simple process. You’ll provide your lender with your banking details—such as checking or savings account information—so they can deposit the funds directly into your account.
Typically, funds are disbursed by the next business day (excluding weekends and holidays). After receiving your loan, it’s important to make your installment payments on time or before the due dates.
Keep in mind that missed payments may result in late fees, and depending on the loan terms, defaulting could lead to additional debt or even loss of assets. If you experience financial difficulties, consider refinancing options to avoid further complications.
Please note, our platform connects you with lenders but is not the lender itself. Loan approval and terms vary by lender and your credit profile.
Frequently Asked Questions
Here are some of the most frequently asked questions about personal installment loans:
Personal installment loans are fantastic loan products for financing all sorts of financial needs, including home improvements, refinancing credit card debt, repaying your student loan, medical bills, or vehicle repairs.
Many lenders offer personal installment loans to customers with bad credit. However, this isn’t to say that your credit record isn’t important since it’s used to determine interest rates and other fees associated with the loan.
The answer to this question depends on the lender and the specific loan product. Generally speaking, the minimum and maximum loan amounts are dictated by the type of the loan and usually range between $200 and $100,000.
Summary
In summary, personal installment loans are fantastic financing solutions when you require access to quick cash to finance all your financial needs and emergencies, or simply consolidate your debt and improve your credit score. If you’re interested in obtaining a personal installment loan, don’t hesitate to start the process; we’ll find you a suitable lender with reasonable terms.
