People always need additional budgets, and the reasons for them may vary dramatically. Shopping, treatment, bills, borrowings and many other things can require urgent financing.
There are several convenient ways of getting money. Today we are going to read about installment loans for bad credit.
Using them, you take the full sum at once and pay for it within a defined term. It can last for several months (short-term loans) or dozens of years (long-term loans). Typical examples of long-term loans are mortgaging and education loans.
The total sum you will need to pay is calculated considering the term, the interest rate and the sum lent. Sometimes you might suffer from additional payments that depend on lending options.
You may pay the so-called loan origination fee as well as prepayment fees, fees for pre-schedule clearing off and fees for overdue payments. All these rates are included in the annual percentage rate.
As a rule, installment loans online for bad credit are characterized by payments: they are steady and regular. It means that you pay equal sums within a defined period of time. In most cases, the payment is taken from a bank account. Some lenders provide the possibility to pay online or using checks or mobile payments.
Installment loans vs payday loans
Professionals define different types of loans. The main characteristics of each one are the way of paying back and regularity of such payment.
- An installment loan is less flexible than payday loans or line of credit. With two last options you can pay only for that money you have spent. Installment loans require paying for the whole sum regardless of the amount of used money
- The time makes a difference. Personal installment loans are usually oriented for longer dependence from a lender. As it was mentioned before, you can even be charged additional fees if you return money too fast. At the same time, you have to return the money as quickly as possible (or by a defined date) when you have got a credit card. On the other hand, with an installment loan, you do not need to think about time constantly. If you gather enough money by the end of each month, you will be ok
- Installment loans for people with bad credit are more stable. The size of each payment is predefined, and it will not change under regular circumstances. A payday loan payment may vary in size from day to day. The same feature concerns the conditions of obtaining such loans. For example, a crisis, no matter how serious it is, cannot affect the predefined interest rates and payments of an installment loan. At the same time, such circumstances have an influence on payday loans, and you can see different interest rates as you have seen a year or month ago
- Usually, small installment loans for bad credit are easier to get than payday loans or line of credit. Often for an unsecured installment loan, you do not have to set your belongings as a pledge
- Installment loans are less convenient. You get the full sum at once. You will not mix your own funds with credit funds, which makes calculation much easier. However, installment loans can do better for one-time purchase for the same reason
- There is another unique benefit of payday loans or lines of credit. When you return money to a credit card or account, you can use them again sometimes. As for an installment loan, each payment you send to lenders cannot be used anyhow. Literally, you say “goodbye” to your money until you pay the full sum
- Interest rates on payday loans are sometimes bigger. They include additional payments like loan insurance. Banks are more likely to give secured or installment loans
Benefits of installment loans for people with a bad credit
Many experts suggest such loans for credit history improvement. Indeed, there are at least three ways to get a better credit score with an installment loan.
First of all, installment loans diversify your credit history.
The well-known FICO score consists of several ratios. One of them is called “Credit mix.” It considers how many loans you have applied for during lifetime. The more kinds of loans you have there, the more chances to get a loan and increase the score you have.
The second fact is that you have got a possibility to get a lower interest rate with personal installment loans for bad credit. The trick will be done only if the loan you are going to apply for has a lower interest rate than your already existing debts.
If you are able to do it, it is useful to reorganize your credit cards and payday loans into one big installment loan. It will not only save your money but help you to get out of debts faster. Statistics show that paying off a credit card fully may take several years. An installment loan term can last much faster.
With an installment loan, you will improve your payment history, which will affect your poor credit mostly. Regular payments will definitely do better for you if they are charged automatically monthly or weekly. Owners of credit cards or payday loans are usually regulated only by their conscience.
How to apply for a personal installment loan online
Nowadays applying for loans has turned out to be easy. You do not have to stand in queues, wait for an interview with a credit manager or prepare a lot of documents. All you have to do is to register on our site. Then you have to fill in a form (it will take not more than 10-15 minutes) and wait for the approval.
As you can see, there is nothing complicated. With us, you have got huge chances to get an installment loan online and fast. Join a great number of our happy customers now and forget about your budget problems!