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Joyce Marter is a licensed psychotherapist with 25 years of experience and entrepreneur who founded and successfully sold Urban Balance, a national outpatient mental health company in the U.S. Marter is an adjunct professor at Northwestern University, international speaker, blogger for Psychology Today and mental health thought-leader specializing in the psychology of money.
Installment loans aren’t complex. Actually, you might already be conversant with them.Two types of installment loans are auto loans and mortgages.
Let’s further examine this loan type and see whether or not you can obtain an installment loan instantly online.
Generally, getting an installment loan means borrowing a lump sum of money and then repaying it over time in the form of monthly payments or installments.
An online installment loan is simply a loan that you can get online without the trouble of going to visit a bank or some other physical ledger.
If you want a loan, you just find a financial institution that’s ready to lend you the funds you need. On approving you for the loan, your lender provides you with the lump sum you’ve agreed upon.
After that, you repay the loan amount plus the interest in steady installments. This payback usually comes like a payment you make monthly.
At the end of the day, you’d repay your loan in full together with any interest via these installments.
The laws, rules, and regulations for your loan may differ across state borders, but there are general federal regulations. Let’s take for instance Regulation B. The regulation offers you protection from discrimination by ordering lenders to give you an explanation if they reject your loan application. Regulation Z protects you from misleading lending practices by making sure you receive things like a monthly billing statement.
The two basic federal laws that relate to loans include the Equal Credit Opportunity Act and the Fair Housing Act. Both of these are meant to stop unfair lending, safeguarding you as a borrower.
Essentially, laws, rules, and regulations differ depending on your location and the type of installment loan you look to get. It’s therefore pertinent to do a little research to know the laws that will protect you and regulate you when you receive an installment loan, even when you get your loan instantly online.
Let’s now look at some of the commonest types of installment loans.
A payday loan basically affords you a way to get an advance on your next paycheck. It is a short-term loan, which means it’s designed to be repaid fast, say in a few weeks. It’s usual to get a payday loan for almost the amount on your next paycheck.
Your payday loan can be used for whatever you want. But it normally comes with a moderately high interest rate.
A payday loan is a kind of unsecured loan. That means you don’t need to collateralize your personal belongings and the lender won’t require proof that you can pay back a loan before granting you one. This makes it simple and faster to get compared to many other types of loans.
An auto loan is a kind of installment loan you get when you buy a vehicle. This loan is often provided by a bank or the auto company from which you bought the car.
Many people go for auto loans because of how low their interest rates are.
A mortgage is a loan package that’s primarily meant to help you purchase a house. Its a very thoughtful thing seeing that a home is among the most significant and costliest things anyone can acquire.
Getting a mortgage will usually see the lender passing you through a very detailed process to ensure you can repay the reasonable amount of money they plan to lend you.
Similar to auto loans, mortgages carry lower interest rates than other kinds of installment loans.
A personal loan can be used for quite anything you want unlike other types of installment loans that are used for specific things e.g. a mortgage to buy a house and an auto loan to purchase a vehicle.
Personal loans can be given in bigger amounts and usually have longer repayment timelines than payday loans.
If you want to get an installment loan, you’ll have to meet the following requirements:
You must be at least 18 years old to obtain a loan in the U.S.
An active checking account helps you to repay your loan.
This proves your possible future earnings to give your lender a rough idea of your ability to repay the loan.
You’ll be required to provide your phone number, address, and email address.
If you are eager to get a loan, you expect the process to be as easy as it can be. Luckily, you can get the loan instantly online with some types of loans.
Let’s say you need a payday loan, for instance. You just need to follow the following steps:
Many payday lenders provide a simple online loan application. Complete the application form to get the process going.
On receiving your application, the lender will either approve or deny it. Your loan will instantly be approved online by some lenders.
The lender, on approving you, will provide you with the amount of loan money you asked for.
There is usually a credit score requirement of at least 630 for many of the types of installment loans discussed above such as auto loans, mortgages, and personal loans. However, you can still receive other types of loans despite having bad credit.
You can get a free periodical credit score report from some banks and credit card companies. Aside from that, you can check your credit score by purchasing or requesting a credit report from one of the credit bureaus—Equifax, Experian, or TransUnion.
You may find your credit score within the lower 600s or lower and you will have limited loan options, but that’s not the end. You can still get payday loans since those lenders don’t run credit checks before granting loans.
There are payday lenders that will guarantee that they’ll offer you a loan even if you have bad credit. It’s advisable to google till you find the option that’s best for you.
As a matter of fact, installment loans have one main pro and conversely balanced by one main con. The advantage is that you can receive a lump sum of money—way bigger than what you have at hand—to acquire some things or clear your expenses. It provides you with the funds you need when you most need them.
Conversely, the disadvantage is that an installment loan comes with interest. In essence, a higher interest rate means you’ll pay more over the loan cycle.
While installment loans can provide you with the funds you need, it’s essential to do your own research on available options so you can rest assured you’re getting the best possible deals.