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Installment loans are quick, simple, do not require good credit, and have lower payments than payday loans. Installment loans are an expensive option so make sure you have considered other options such as bank loans, credit cards, or friends and family before taking one of these loans. They are best used for short-term, emergency funding only.
What Are Installment Loans
Installment loans are available to individuals with bad or no credit, typically unsecured, and linked to your pay date. This means it is generally easy to get one of these loans but the trade-off of installment loans is they can be very expensive. They should generally not be used except to meet unavoidable emergency expense like utility bills or medical bills
Traditionally, installment loans are loans paid back over multiple periods with a set payment amount. The payment amount for these loans is calculated based on the interest rate, payment periods, and loan amount. The borrower then makes a set payment at every period. Each payment consists of interest and principal. Once the borrower has completed all payments the entire loan is paid off. Fixed mortgages, auto loans, and student loans are examples of installment loans.
Secured Or Unsecured
There are two types of installment loans: secured and unsecured. Secured loans have collateral so, if the borrower fails to re-pay the loan, the lender can seize the collateral. Secured loans are generally cheaper than unsecured loans. Mortgages and auto loans are examples of secured loans
Unsecured loans are loans that have no collateral. The installment loans offered on this site are unsecured loans. This means no collateral is needed. With unsecured loans if the borrower fails to re-pay the lender often has no recourse to recover their funds. When a lender makes an unsecured loan the lending decision is highly dependent on evaluating the ability of the borrow to repay the loan. To make these loans lenders general rely on credit history and income to estimate the propensity of the borrow to repay. Personal loans made by banks are examples of unsecured installment loans.
Paycheck Installment Loans
Installment loans offered on this site are generally paycheck installment loans. This means that the payments for these loans often occur on your pay date. These loans do not consider your credit history and instead are based solely on the pay check. To increase the likelihood of being repaid most lenders offering installment loans require access to the account where you receive your paycheck so they can deduct your loans payments as soon as you are paid.
Companies offering paycheck installment loans have made these loans very attractive. These loans are quick, simple, do not require good credit, and have lower payments. Yet, users must approach these installment loans with caution as their fees do make them an expensive option so make sure you have considered other options such as bank loans, credit cards, or friends and family before taking one of these loans. installment loans are designed for short-term, emergency funding and are best used for this purpose.
How Installment Loans Work
If installment loans are right for you, the application process can take only 5 to 25 minutes. In general the lender will require that you are 18+ years old, are employed, and have direct deposit. Money can be deposited into you account within one business day. This money is a loan and must be repaid in full. Payments are generally automatically deducted from your checking account on payday.When taking out installment loans, your lender will give you a payment plan. For example, $1,000 could have a repayment plan with a ~$125 payment every pay period (14 days) over the next 24 pay periods. In the end ~$1,000 costs ~$2,400. This is cheaper than what you would have to pay if you took out a payday loan for the same time-frame, but clearly not cheap so be careful to make sure you really need this loan. Also consider other borrow money options such as delaying the expense or getting help from a friend.
Licensed Versus Unlicensed Lenders
Installment loans are regulated by both federal and state laws. State licensed lenders are regulated and monitored by the state so are more closely regulated than lenders not licensed by your state. Unlicensed lenders operate in states under the assumption they can export laws from their state or tribe (Indian Tribes are generally treated as federal entities) into other states. The validity of this assumption is unclear. The Payday Hound believes licensed lenders are a safer choice for borrowers and would avoid unlicensed lenders. For more information see Payday Loan Laws or Installment Loan Lenders
Installment Loans Versus Payday Loans
The difference between installment loans and payday loans is that payments are spread out over time. This reduces the amount of individual payments and your APR for an installment loan but the total amount of fees paid increases a well. See Payday Loans or Installment Loans for more information. Many consumers prefer installment loans because paying the entire loan at your next pay period, as payday loans require, is often too difficult or impossible and renewing payday loans becomes extremely expensive.
Find Loan Lenders by State
Installment loans are state regulated so not all lenders make loans in all states. To find the best rates that are available in your state select your state below.
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Full List of Installment Loans
The Payday Hound reviews payday lenders and ranks them according to our Sniff Test (reputation), costs, and licensing. Being included on our list is not endorsement or certification. The list is a ranking and is designed to help borrowers rate and judge the quality of lenders. This means it may include lenders we believe to be honest as well as those we would deem to be predatory. To see lenders who provide installment loans in your state select your state from the table above.