Installment Loans for Bad Credit Consumers: Are They Right for You?
Eight in 10 Americans have debt. That’s a fact of life now in the country and while it’s not always a bad thing, some people do suffer from too much debt. Many can’t recover because they have bad credit scores.
If you fall into the latter category then you understand the kind of trouble you’re in. You might be teetering on the edge of bankruptcy. The worst part is that banks and credit unions won’t give you a loan since your credit is bad.
The good thing is there’s still hope. You can request installment loans for bad credit.
Unlike your standard secured loans, these are financial aids you can request online and get a response or approval in a few minutes. There are no long lines and you don’t wait days for a response.
How do these loans work? How is it possible to get installment loans for bad credit users?
It all starts with the fact that we don’t check your credit at all.
No Credit Check
That’s right there’s no background check to see how your credit score is doing. Most banks and credit unions will stop your request the moment they run a credit check. Their common rule is to avoid lending money to people with low scores.
Without a credit check, you get the guarantee that there’s a higher chance of approval. The only aspects you need to prove to include having a stable income and a fallback reimbursement the lender can turn to in case you can’t pay.
What does this all mean?
Even if you have a bad credit score you can still get a decent loan. You might be wondering what qualifies as bad credit in the first place. Let’s take a quick detour to explain how credit scores work and why you might not qualify for regular loans.
What Counts as Bad Credit?
As a matter of fact, the whole country runs on this system. The Fair Isaac Corporation or FICO established the credit score system. It’s how banks check if a person has a history of paying debt and previous loans.
The lowest score you can have is 300 and the highest is 800. In the United States, the average credit score in 2017 is 700. People are learning to pay their credit on time and to avoid carrying over the remaining balances.
If you have a score closer to 300 then it might get difficult to request a loan. Banks will see it and think they can’t rely on you to pay on time.
It might not be your fault but they won’t understand that. People can’t foresee medical emergencies or other urgent payments that could prevent you from paying your credit. Banks don’t see things this way and all they care about is your score.
You might even end up with credit card debt. The total credit card debt in the country, as of 2017, now amounts to $764 billion. You might be one of the unlucky ones who fall under this web of debt.
One way to work around this problem is to request installment loans for bad credit. These loans can help you get back on your feet.
Why Request Installment Loans for Bad Credit?
What’s in it for you? Why are installment loans for bad credit the solution to consider?
If you have bad credit, you could fall into the following traps:
- Inability to get a phone contract
- Troublesome mortgages
- Rejected for employment
Yes, companies might turn down your request if your credit score is bad. They might think it reflects you as a person even when it shouldn’t.
Installment loans for bad credit can help you rise up from the bottom. With a single loan, you can pay off your debts. You won’t have to deal with half a dozen different credit bills to pay.
Now you’ll only have one loan to pay back.
An installment loan is simple to grasp: you borrow a sum of cash and the lender lays out a monthly plan for you to pay it back. You might have to pay the amount in a few weeks or a few months, depending on your income and how much you borrowed.
You might be thinking an installment loan is similar to payday loans and quick cash loans.
Though they are similar, there are a few key differences too. To understand why installment loans for bad credit are good for you, you have to first learn why they’re not the same as payday loans.
It’s Safer Than Payday Loans
A payday loan is a one-and-done deal. You borrow a sum of money but you have to pay it back on your next payday. If you don’t, the lender charges you with a high-interest rate and you’ll sink even further into debt.
Payday loans tend to have high penalty rates. The interest rate, in the beginning, could be low but the moment you miss the deadline for payment it’ll shoot upwards to 400% and more.
That’s not to say payday loans are bad. If you know you can pay the terms by the next salary, you should give these loans a try. As of 2016, 12 million Americans rely on payday loans to get out of financial emergencies.
If you can’t pay that sum of money in such a quick turnaround, an installment loan is the better option.
Installment loans for bad credit space out the payment plan into small increments. You can choose to pay little by little so that it doesn’t burden you. This guarantees you can fit the payments into your regular budget.
Check for Collateral
Most loans will check for a collateral. These are things you own that the lender can take and sell to recover the money they lent you in case you can’t pay. It Collateral serves as a backup plan for the lender if you default on the loan.
Some of the most common collateral options include:
- Your business
- Home property
- Valuable appliances
The best thing about installment loans for bad credit is that there is no collateral. You don’t have to risk your home or business to get out of a financial hole.
This is one of the best reasons to go for an installment loan when your finances dry up. You can get the money you need without having to put everything you have at risk.
Know the Full Requirements
What are the requirements for installment loans for bad credit? As mentioned, you don’t need collateral and you don’t need a good credit score. Instead, the list of requirements are:
- Reside in the United States
- Be of legal age (18 to 65)
- Active phone that can receive both SMS messages and calls
- Have a functional bank account
- Regular source of income
- A debit/credit card as a fallback for the lender
Your income doesn’t have to come from a job. You might be a recipient of financial aid or someone might be sending you money every month. As long as the money comes in on a regular basis, you can list it down as your income.
Why do they need your bank account? This is where you’ll receive the loan. You can also pay the loan directly to your account.
You Still Need a Debit or Credit Card
If you look into the requirements, you will notice that you still need a card to qualify for installments for bad credit. The reason is that the lender needs some form of insurance.
They don’t ask you to give any collateral. If you default the loan, the lender would lose out on thousands of dollars. The best way they can protect themselves and collect payment without pushing you down is to have a backup payment plan.
That backup is your debit or credit card.
Your card will serve as a reimbursement for the loan payment. As long as you keep up with your installment payments, you won’t have to worry about losing your card in the end.
Once you’ve collected all the requirements, you can request installment loans for bad credit. The more surprising detail is that the request and approval process is a lot faster than you’d think.
Speed of Process
Filling up the form and getting a response can take minutes.
Yes, you read that right. Completing the form, submitting it, and getting an approval or rejection only takes a few minutes. At the most, it could take an hour but this is a rare occasion.
The best part is that you can request installment loans for bad credit online. The online loan process is always available and you get the guarantee that they’ll respond as soon as possible.
Requesting the loan is only the first half. Receiving the money is the other and when you get installment loans for bad credit, the cash comes in less than a day.
You need the financial help for an emergency and it wouldn’t make much sense if lenders took days or weeks to give you the money.
Business and Individual Loans
There is one thing to keep in mind: you can’t get personal installment loans for bad credit if you’re requesting on behalf of your business company. These loans are for individuals.
For this reason, the minimum and maximum amount you can loan is small. In most cases, the least you can borrow is $100 while the maximum stretches from $2,500 to $5,000.
While this is a large amount of money for individuals, $5,000 is not much help for a business. This system guarantees that only individuals request emergency installment loans.
Businesses tend to borrow more than this range and that can be too much of a risk for lenders.
No Up-Front Fees
Some loan sharks will tell you that they can lend you a large amount of cash but will ask you to pay a small up-front fee. This money is for processing charges and other miscellaneous costs. The thing about installment loans for bad credit is that there are no such fees.
It’s all done online so you don’t have to pay for transaction fees. There are no hidden fees and loan charges. All you have to do is fill up and submit the request form.
Always make it a habit to read the lender’s official FAQ. Some of the most common questions, like those in regards to up-front fees and payment plans, get addressed in the Frequently Asked Questions page.
If you do see a lender that charges up-front fees, you’ll want to take a moment and step away. That lender could be a scammer. They’ll take your upfront payment but will not approve you for a loan even if you should qualify for it.
This is how they cheat people into paying them cash. Don’t fall for it. Sign on only for installment loans for bad credit without any upfront charges.
What Will Disqualify You?
It sounds easy to get an approval for installment loans, right? It sure is but you can still get disqualified. Here’s a rundown of what might disqualify you from getting a loan approval:
- You’re not in the approved age range
- Your bank account is not active
- No credit/debit card available
- No active phone number
- Lack of steady income
If you’ve filed for bankruptcy then it is less likely you’ll get a loan approval. This is because you’re too much of a risk. You’re already bankrupt with no source of income.
Get an Installment Loan Today
What are you waiting for? If you have a financial emergency then you need to request installment loans for bad credit as soon as you can.
Still not sure how it works? Do you want to know if you qualify or if this is even the right solution for your needs? Our lines are always open so contact us for further inquiries and request.
Are installment loans not what you’re looking for? Don’t fret because we offer other financial solutions as well, from payday loans to credit cards for bad credit. We are here to help you get out of any financial problems.
Information contained on this page is provided by an independent third-party content provider. Frankly and this Site make no warranties or representations in connection therewith. If you are affiliated with this page and would like it removed please contact firstname.lastname@example.org