If you are stuck in a financial emergency, you might need a loan to help you out with the money requirements. It is extremely easy to get a loan if your credit score is good, but if your credit score is bad, your lending options become limited.
Plus, when you get a loan, it is important to plan its repayment in such a way that you can balance your loan as well as your expenses. That’s when installment loans make the work easy for you. They allow you to repay your loan in easy monthly installments so that you can also manage your lifestyle.
In this write-up, we are going to tell you about the top 10 lenders that will offer you guaranteed installment loans for bad credit so that your bad credit score does not restrict you from getting a loan. We will also tell you about all the things that you should take care of while getting a loan, how you can apply for an installment loan, and basically everything that you need to know. So now let’s dive deeper into it.
Top 10 Installment Loans for Bad Credit
Now that you know what are installment loans and what are installment loans bad credit, in this article, we are going to tell you about the top 10 lenders that will offer you guaranteed installment loans for bad credit. In case you need an installment loan for bad credit, you can go to any of the following lenders that fulfill all your needs.
Are you someone with a bad credit score and looking for an installment loan? Well, you do not need to worry, BadCreditLoans.com got your back. As the name suggests BadCreditLoans.com is especially there to offer loans to bad credit score holders. It is a financial service that connects borrowers with lenders who may be able to provide loans to those with bad credit.
The website provides a platform for borrowers to submit loan requests and receive offers from multiple lenders. They will definitely offer you the best bad credit installment loans. Their loan amount ranges from $500 to $10,000, and the interest rate can be somewhat between 5.99% to 35.99%. The best part about this lending service is, they have a limited maximum interest rate of 35.99%, so no lender can ask you for a higher interest rate.
If you have bad credit, you may be able guaranteed installment loans for bad credit direct lenders only, however, it may come with high-interest rates and fees, as these lenders may be more willing to lend to borrowers with poor credit.
- Loan Amount: $500 to $10,000
- Interest Rate: 5.99% to 35.99%
- Loan Term: 3 months to 60 months
- Regular Income: Needed
- Preferred Credit Score: None
- It comes with a restrictive maximum interest rate of 35.99%.
- You can apply for loan pre-qualification.
- You get to choose from multiple loan options.
- The application and approval process is very easy.
Looking for bad credit installment loans guaranteed approval? If yes, then PersonalLoans.com is the right choice for you. While it is very easy to get a personal loan for good credit, PersonalLoans.com offers you online installment loans for bad credit. It is a very famous money lending service in the U.S.A. for borrowers to compare and apply for personal loans from a network of lenders.
The website allows borrowers to submit a loan request and receive offers from multiple lenders based on their credit history, income, and other financial factors. They offer loans ranging from $1,000 to $35,000. The loans come with a loan term of 3 months to 72 weeks, depending on your loan amount and credit score.
Before applying for an installment loan through PersonalLoans.com, it’s important to carefully review the terms and conditions of the loan, including the interest rate, fees, and repayment terms. You should also compare offers from multiple lenders to find the best option for your needs. You can definitely consider PersonalLoans.com for guaranteed installment loans for bad credit direct lenders only
- Loan Amount: $1,000 to $35,000
- Loan Term: 3 months to 72 months
- Interest Rate: 5.99% to 35.99%
- Origination Fee: None
- There is no origination fee.
- PersonalLoans.com does not charge any fee for the services it offers.
- The lenders on this website are verified.
- You get multiple loan offers within a few minutes.
CashUSA is an online lending platform that offers installment loans to borrowers. It connects borrowers with a network of lenders who offer loans ranging from $500 to $10,000 with repayment terms of up to 72 months. It provides an easy and convenient way for borrowers to find and compare different loan offers and apply for a loan online.
In order to get a loan from CashUSA, your age must be 18 years and you must be a legal resident of the U.S.A. Moreover, you need to have a stable monthly income and an active bank account, then only you will qualify for a loan.
If you want guaranteed installment loans for bad credit direct lenders only from CashUSA then you can start the application process on their website. The application process is simple and takes just a few minutes to complete. After submitting the application, CashUSA will send your application to the lenders and you will start receiving loan offers in just a few minutes. If you accept the offer, you’ll receive the loan funds directly into your checking account within just one to two business days.
- Loan Amount: $500 to $10,000
- Interest Rate: 5.99% to 35.99%
- Loan Term: Up to 72 months
- Minimum Monthly Income: $1,000
- Super fast funding.
- They offer installment loans online for bad credit.
- You get to choose from multiple loan options.
- You only need a minimum monthly income of $1,000.
If you are looking for installment loans with bad credit direct lenders then LendingClub is a good option for you. LendingClub is an online lending platform that provides personal loans to borrowers. It offers loans ranging from $1,000 to $40,000 with repayment terms of 36 or 60 months. The interest rate may vary from 8.3% to 36.00.
LendingClub uses a peer-to-peer lending model, which means that borrowers receive loan funds from individual investors, rather than from a traditional bank. But you will need to keep in mind they only offer unsecured loans so the interest rate can be higher than what you are expecting.
Overall, LendingClub is a famous money lending service in the U.S.A. and till now they have helped thousands of U.S.A. citizens in meeting their financial needs. They have several positive ratings and reviews online. LendingClub conducts a soft inquiry of your credit score before offering you the loan so you do not need to worry about hard credit pull.
- Minimum Credit Score: N/A
- Loan Term: 3 to 5 years
- Loan Amount: $1,000 to $40,000
- Minimum Annual Income: $0.00
- Service Fee: 1% to 6%
- APR Range: 8.3% to 36.00%
- They do not conduct a hard inquiry into your credit score.
- Offer loans to bad credit holders as well as.
- The peer-to-peer setup makes it easy for people to get loans.
- You do not need to have any monthly income.
- One of the best options for bad credit installment loans guaranteed approval.
The Upgrade is a very famous money lending service in the U.S.A. It came into the market in the year 2017 and since then, it has provided loans to thousands of people and has gained a good reputation and popularity. It offers loans ranging from $1,000 to $50,000 with repayment terms of 36 to 60 months, depending on your loan amount and credit score.
Upgrade uses a combination of traditional underwriting methods and advanced technology to evaluate borrowers’ creditworthiness and to provide personalized loan offers. The best part about Upgrade is, it comes with a restrictive interest rate of 35%, so no lender can ask you for a higher interest rate, and if they do, you can report it to the Upgrade customer care service and they will take strict action against that lender.
Their loan application process is quick and easy, and you’ll receive a loan offer in as little as two minutes. After accepting the loan offer, you’ll receive the loan funds directly into your bank account. Moreover, Upgrade also offers free access to its credit monitoring and identity theft protection services, which can help you monitor your credit and protect your personal information. They offer one of the best guaranteed installment loans for bad credit direct lenders only.
- Loan Amount: $1,000 to $50,000
- Loan Term: 36 to 60 months
- Required Credit Score: 62 points
- Interest Rate: Up to 35%
- Fund Deposit: 1 business day
- There is no origination fee.
- They do not charge any service fee.
- The loan amount is deposited into your bank account in just 1 business day.
- These loans come with a lower APR as compared to other loan options.
If you are looking for installment loans for bad credit scores then you can definitely consider LightStream. It is a division of SunTrust Bank that provides personal loans to borrowers. It offers loans ranging from $5,000 to $100,000 with repayment terms of 24 to 144 months which means 2 years to 12 years. The interest rate ranges from 5.99% to 23.99%.
LightStream uses a unique lending model that provides borrowers with low, fixed interest rates, no fees, and the ability to apply for a loan and receive funds the same day. Moreover, they do not charge any origination fee, so you do not need to pay any fee before receiving the funds. Also, they offer discounted APR if you choose the autopay option.
If you want to get an installment loan from LightStream then you just need to go to their official website, create your profile and apply for the loan. As soon as you apply for the loan, you will start receiving loan offers and then you can move ahead with the loan that fits all your needs.
- Loan Amount: $5,000 to $100,000
- APR: 5.99% to 23.99% (With Autopay)
- Loan Term: 2 to 12 years
- Origination Fee: None
- You can apply for pre-qualification to get an idea about the loan.
- Discounted APR with autopay.
- No prepayment fee or origination fee.
- Easy loan application and approval process.
Upstart is one of the best lending services in the U.S.A. Its mission is to provide fair, fast, and convenient access to credit for people who may not qualify for traditional loans. With Upstart, borrowers can apply for loans online and get funds as quickly as the next business day.
Upstart’s loans can be used for a variety of purposes, including debt consolidation, home improvement, and emergency expenses. They offer loans ranging from $1,000 to $50,000. The loan term can be between 3 to 5 years depending on your loan amount and creditworthiness.
The interest rate of Upstart loans is 6.5% to 35.99%. You will only get a loan from Upstart if your age is 18 years or more and you are a citizen or resident of the U.S.A. Also, you need to have an annual income of $12,000 or more. It also comes with a 15 days grace period, so if you forget to pay any installment, they would not charge any late fee for 15 days, but if you delay more than that then you will have to pay the late fee along with the interest.
- Loan Amount: $1,000 to $50,000
- Loan Term: 3 to 5 years
- Interest Rate: 6.5% to 35.99%
- Minimum Annual Income: $12,000
- Minimum Credit Score: None
- Origination Fee: 8.00%
- Even with a bad credit score or no credit history at all, you can get an installment loan.
- If you need a loan for debt consolidation, they will make direct payments to the creditor.
- Immediate loan amount funding.
- Flexible loan repayment dates.
- Good for bad credit installment loans guaranteed approval
LendingPoint is a good and reputed money lending service. It aims to provide fair and responsible access to loans for people who may not have had such access in the past. They offer loans ranging from $2,000 to $30,000, with terms of 24 to 72 months.
LendingPoint primarily targets consumers who have less-than-perfect credit and are looking for a loan to consolidate debt or finance a major purchase. These loans come with an interest rate of 7.99% to 35.99%. They also charge a loan origination fee, which you need to pay before getting the loan funding. The fee can be 0.00% to 8.00% of your total loan amount, depending upon the state and loan amount.
The best part about LendingPoint is, they allow you to pre-qualify for the loan with a soft credit check so that you can have an idea about the loan amount, term, and interest rate that you might get. They also have a user-friendly mobile application that allows you to make installment payments and check the status of your loan. All in all, LendingPoint is best for guaranteed installment loans for bad credit.
- Loan Amount: $2,000 to $30,000
- Loan Term: 24 to 72 months
- Origination Fees: 0.00% to 8.00%, depending upon the state and loan amount
- Minimum Required Annual Income: $35,000
- They have an easy-to-use mobile app, which makes loan installment payments easy.
- They only conduct a hard inquiry of your credit if you qualify for the pre-qualification.
- The loan amount is deposited into your bank account within 1 to 3 business days.
- You are allowed to change your installment payment date.
- LendingPoint also allows you to keep a track of your credit score.
If you are looking for bad credit installment loans then you must consider Avant. Avant is a well-known money lending service that offers various kinds of loans to people in need. They provide loans for a variety of purposes, including debt consolidation, home improvements, and unexpected expenses.
Avant loans typically range from $2,000 to $35,000 and are repaid over a period of 24 to 60 months. They consider various factors to determine loan approval and interest rates, taking into account factors such as credit score, income, and debt-to-income ratio.
They started offering money lending services in 2012, and just within a small amount of time, they have gained a good reputation and popularity among the people of the U.S.A. The interest rate of your loan depends on your loan amount, loan term, and creditworthiness and can be between 9.95% to 35.95%.
- Loan Amount: $2,000 to $35,000
- Loan Term: 24 to 60 months
- Administrative Fee: Up to 4.75%
- Interest Rate: 9.95% to 35.95%
- They offer a variety of loans including unsecured and secured loans.
- Flexible loan repayment date.
- Easy loan application and approval process.
- They offer bad credit installment loans guaranteed approval.
- Pre-qualification with a soft credit check is available.
- Official website and an easy-to-understand interface.
MoneyMutual is an online marketplace that connects borrowers with lenders for short-term loans so if you are looking for installment loans for bad credit, you can definitely consider MoneyMutual. They do not lend money directly but instead act as a mediator between borrowers and lenders.
Loan amounts through MoneyMutual typically range from $100 to $5,000. The repayment term depends on the lender. Borrowers can use the funds for a variety of purposes, including unexpected expenses, car repairs, or emergency bills. The interest rate for these loans is typically 5.99% to 35.99%.
To be eligible for a loan through MoneyMutual, borrowers must be at least 18 years old and have a steady source of income. MoneyMutual states that they work with lenders that offer loans to individuals with a range of credit profiles, including those with less-than-perfect credit. All in all, MoneyMutual is a good option for bad credit installment loans.
- Loan Amount: $100 to $5,000
- Loan Term: Varies from lender to lender
- Interest Rate: 5.99% to 35.99%
- Minimum Monthly Income: $800
- Good for short-term loans.
- They have served more than 2 million people till now, so they have a good reputation.
- The loan amount is deposited into your bank account just within a few minutes after loan approval.
- You can use the loan amount for multiple purposes.
- They offer guaranteed installment loans for bad credit.
What are Installment Loans for Bad Credit?
Installment loans for bad credit are a type of loan specifically designed for people with a low credit score or no credit history at all. These loans typically provide access to loans for people who may not be approved for a loan from a traditional lender such as a bank.
These loans might have higher interest rates and fees compared to loans for people with good credit, as the lender is taking on a higher level of risk by lending to a borrower with a lower credit score. The repayment terms might also be less flexible.
It’s important to note that while installment loans can provide access to loans for people with poor credit, they can also lead to a cycle of debt and further damage to a person’s credit score if not used responsibly.
If you are not good with managing your finances and keeping a track of the loan repayment dates then we recommend you look for other options such as improving credit through responsible borrowing and on-time repayment before taking out an installment loan for bad credit. Also, If the loan is very necessary, you must carefully compare lenders and terms to find the best deal and avoid high-interest rates and fees.
Advantages of Installment Loans
In this section, we are going to tell you about some of the advantages of installment loans. These points will help you decide if an installment loan would work for you or not.
1. Predictable Payments
With an installment loan, the borrower knows exactly how much they will need to pay each month, making it easier to budget and plan for loan repayment. Moreover, it also helps you decide which loan would work better for you.
2. Fixed Interest Rate
The interest rate on an installment loan is typically fixed, which means that the rate will not change over the life of the loan. This can provide peace of mind for the borrower, who will not have to worry about rising interest rates increasing their monthly payments.
Installment loans can be used for a variety of purposes, including home improvement projects, debt consolidation, or major purchases. This versatility makes installment loans a useful tool for many different financial situations. If you are not able to get any particular loan due to bad credit, you can also go for personal installment loans for bad credit and then use that money for any purpose that you want.
4. Improved Credit Score
Repaying an installment loan on time can help you improve your credit score, as long-term, on-time loan repayment is viewed positively by credit reporting agencies. But for this, you will have to make sure that you make all your payments on time, otherwise, it can also turn against you and mess up your credit score and credit report for years.
5. No collateral is required
Some installment loans, such as personal loans, do not require collateral, which makes them accessible to a wider range of borrowers. Also, if your credit score is bad, you can apply for a co-signer or joint loan.
Disadvantages of Installment Loans
It’s important to keep in mind that while installment loans can offer many benefits, they also come with obligations and responsibilities. Here are some of the disadvantages of installment loans:
1. Higher Interest Rate
Installment loans may have higher interest rates and fees compared to other types of loans, such as secured loans. This means that the overall cost of borrowing can be higher. But it also depends on your credit score and creditworthiness.
2. Rigid Repayment Terms
The terms of an installment loan, including the repayment period and payment amount, are set at the time the loan is originated and cannot be changed. This can make it difficult for borrowers who experience changes in their financial circumstances. Whereas, some lenders might allow you to change your loan repayment date.
3. Penalties for Late Payments
Missing an installment loan payment can result in late fees and added interest charges, which can significantly increase the overall cost of the loan. Moreover, if you do not pay the installment for more than 120 to 180 days, the lender can also declare your account as charged off.
4. Debt Cycle
Installment loans can become a debt trap for borrowers who take out multiple loans or who have difficulty managing their finances. The fixed payments can make it difficult for borrowers to pay off the loan early or make additional payments, leading to a longer repayment period and higher overall cost. You might also need to go for debt consolidation.
5. Limited Use of the Loan Amount
The funds from an installment loan can only be used for the specific purpose outlined in the loan agreement, and cannot be used for other expenses.
Where Can I Get an Installment Loan?
There are multiple financial institutions that offer Installment loans. Here is a list of some of the lenders that offer installment loans. Let’s have a look.
Many traditional banks offer installment loans, including personal loans, and secured loans such as home equity loans. If you are looking for a loan, it is better to consider banks first because they offer loans at a low-interest rate and they keep your security a top priority. Though they take days to approve the loan and deposit the loan amount and the paperwork can be tiring for some people. Also, you will only get a loan from the bank if your credit score is good.
2. Credit Union
Credit unions often offer installment loans at competitive interest rates and terms. But the main problem with credit unions is, they only offer loans to their members. So if you want to take a loan from a credit union, you will have to become a member of that credit union first. Also, they only offer small loans, that too for good credit holders only. So credit unions might not be a good option for bad credit installment loans.
3. Online Money Lending Services
If none of the above options worked for you, you can consider going for online money lending services like Avant, LendingPoint, CashUSA, etc. They will easily provide you with guaranteed installment loans for bad credit. But make sure that you shop around and compare offers from multiple lenders to find the best interest rate and terms for your needs.
4. Direct Lenders
Direct lenders are lenders who are not associated with any bank, money lending service, or financial institution. If you are looking for a bad credit loan guaranteed approval, you can directly go to these lenders and ask for it. You can find these lenders both online and offline. But before getting a loan from a direct lender, make sure that you check their terms and conditions because there might be some hidden fees. Also, do not forget to check the ratings and reviews of the lender before making the final call.
How to Get an Installment Loan?
Getting an installment loan is easy, but you might face some hurdles if your credit score is bad. You can follow the steps given below to make sure that you get an installment loan irrespective of your credit score.
1. See How Much Loan Amount You Need
The most important thing is to decide the loan amount that you need. Consider how much money you need to borrow and how long will it take to repay the loan. This will help you determine what type of loan and lender is right for you. Keep in mind that you only will have to repay the loan along with the interest. So only go for an amount that you actually need.
2. Look At Your Credit Score
In the next step, you need to check your credit score. After this, make a list of all the potential lenders that can offer you a required loan at your current credit score. Here you can include banks, credit unions, and online lenders.
Here you need to make a list of all the potential lenders and compare their interest rates, APR, origination fee, credit reporting, loan terms, fees, and repayment options. Carefully review the terms and conditions of each loan offer you receive to ensure you understand the loan’s fees, interest rate, and repayment options.
4. Apply For Pre-Qualification
Once you have the final list of the best lenders, apply for pre-qualification. Here the lender will conduct a soft inquiry of your credit and will let you know about the interest rate, loan amount, loan term, etc that you will get. This will help you to decide which lender fits all your needs without harming your credit score.
4. Plan The Repayment
Now that you have an idea about the loan, see if you would be able to repay the loan on time with your current income or not. Make sure that you only go for a loan that would not harshly affect your lifestyle. Because if you are not able to repay the loan on time, the lender can even declare your account as charged off.
5. Submit the Final Loan Application
Once you have selected a lender, you will need to submit a loan application. If you are getting a loan from a bank, you will need to go to the bank and file an application, and if you are getting a loan from an online money lending service then you will need to go to their official website and fill up the loan application.
The application will typically include personal and financial information, such as your full name, contact details, complete address, employment and income information, and a credit check. Make sure that you keep all your important documents like identity proof, age proof, income proof, etc ready because you might need to attach these documents with the loan application. Once you are done with the application, submit it to the lender.
6. Review and Sign the Loan Agreement
After submitting the loan application, the lender will determine if they want to offer you a loan or not. If your loan is approved, you will need to review and sign loan documents, including the loan agreement and any related disclosures. Make sure that you read the loan agreement properly to avoid any confusion at later stages.
7. Receive the Loan Amount
Once the loan documents have been signed and processed, the loan proceeds will typically be deposited directly into your bank account. If you are taking a loan from a bank or credit union, they might take a week or so in submitting the loan amount, but if you go for an online lender, they will deposit the loan amount into your bank account within one to two business days.
8. Make Timely Payments
Be sure to make timely payments on your loan according to the loan agreement and schedule. Late payments can harm your credit score and may result in additional fees. This can affect your credit report for years.
Qualifications for an Installment Loan
You can only get a loan if you meet the eligibility criteria of that particular loan. The qualifications for an installment loan can vary depending on the lender, but generally, you will need to meet the following criteria:
- Age: You must be at least 18 years old to apply for an installment loan.
- Residency: You must be a legal resident of the U.S.A. Then only any bank or lender will offer you a loan.
- Income: You must have a steady income, either from employment or other sources such as government benefits or retirement. Some leaders might even ask you to provide your income proof.
- Credit Score: Most lenders will check your credit history and credit score to determine your creditworthiness. While some lenders may offer loans to people with bad credit, interest rates, and loan terms may be less favorable.
- Active Bank Account: You will typically need to provide proof of an active bank account in your name. This is where the loan funds will be deposited and where loan payments will be withdrawn.
- Identity Proof: You will typically need to provide government-issued identification to verify your identity.
Note: These requirements can vary from lender to lender, so be sure to check with the specific lender you are considering for their specific requirements. Additionally, some lenders may have additional eligibility criteria, such as minimum income or debt-to-income ratio, so be sure to ask about any additional requirements when shopping for a loan.
When Should You Go for an Installment Loan?
Installment loans are easy to get and easy to repay. The best part about these loans is, you can use the loan amount for any purpose. Here are some of the options/options where an installment loan might be useful.
1. To Consolidate Debt
If you have high-interest credit card debt or multiple small loans, an installment loan can be used to consolidate these debts into a single, lower-interest loan with a set repayment schedule. Some lenders even directly deposit the loan amount to the creditor so that you do not end up misusing the loan amount.
2. To Cover Large Expenses
An installment loan can be used to cover large expenses, such as home repairs, medical bills, or education costs, that you can’t afford to pay in cash. All in all, you can use this loan for all kinds of emergencies.
3. To Improve Your Credit
Even if you do not need a loan right now, making timely payments on an installment loan can help you improve your credit score over time. If you do not have a credit card, an installment loan can help you boost your credit score.
4. To Avoid Using High-Interest Credit Options
An installment loan can be a better option than using high-interest credit options, such as credit cards or payday loans, to pay for large expenses. Later you can repay this loan in easy monthly installments.
Things to Consider While Getting an Installment Loan
In order to get an installment loan that is beneficial for you, you need to take care of factors like interest rate, loan term, etc. Here are some key factors to consider when getting an installment loan:
1. Interest Rate
Compare interest rates offered by different lenders and choose the one with the lowest rate. This will help keep your monthly payments affordable and reduce the total cost of the loan. Also, do not blindly fall for the low-interest rate because some lenders might charge low-interest rates with high origination fees and other fees.
2. Loan Term
The loan term is the length of time over which you will repay the loan. Shorter loan terms usually have higher monthly payments, but lower overall interest costs. Longer loan terms will have lower monthly payments, but higher overall interest costs. See what fits best for you and then make your final decision.
Make sure that you check for all the fees associated with the loan, such as origination fees, late fees, administration fees, service fees, or prepayment penalties. These fees can add up and significantly increase the cost of the loan.
4. Repayment Schedule Flexibility
Some lenders offer flexible repayment schedules, while others have a set schedule. Make sure to choose a repayment schedule that works best for your financial situation. If you go for a flexible schedule, you will get a chance to change your installment payment date.
5. Lender’s Reputation
Do complete research regarding the lender you are considering to ensure they are reputable and have a good track record. Check online reviews and ratings from previous customers to have better knowledge about it.
Consider whether the loan requires collateral, such as a car or home, and understand the risks involved if you are unable to repay the loan. Moreover, secured loans come with a low-interest rate, so if you want a loan with a loan interest rate then you can consider going for a secured installment loan.
7. Early Payment Options and Fees
Some lenders may allow you to make early payments or pay off the loan ahead of schedule without penalty. This can be a good option if you want to save on interest or pay off the loan more quickly.
How Does an Installment Loan Affect Your Credit Score?
Installment loans can have both positive and negative impacts on your credit score, depending on how you manage the loan. Here’s how installment loans can affect your credit:
- Payment History: Making timely payments on an installment loan can help improve your payment history, which is one of the most important factors in determining your credit score. It amounts to a total of 30% of your credit score.
- Credit Utilization: An installment loan can also help lower your credit utilization, which is the amount of credit you are using compared to your credit limit. Keeping your credit utilization low can help improve your credit score.
- Late Payments: Late payments on an installment loan can have a negative impact on your credit score. These payments are reported to the credit bureaus and can stay on your credit report for up to seven years.
- High Debt-to-Income Ratio: Having a high debt-to-income ratio, which is the amount of debt you have compared to your income, can also hurt your credit score. Taking out an installment loan can increase your debt-to-income ratio, especially if you have other outstanding debts.
All in all, it is very crucial to manage your installment loan responsibly by making timely payments and keeping your debt-to-income ratio in check. If you’re having trouble making payments, contact your lender as soon as possible to discuss alternative payment options or to see if a loan modification is possible. You need to be extra careful if you are going for installment loans for bad credit.
Can I Get an Installment Loan With No Credit Check?
Yes, some online lenders may offer installment loans with no credit check. However, these loans typically come with high-interest rates and fees, and may not be the best option for borrowers with bad credit.
Lenders that offer no credit check loans may use alternative methods to assess a borrower’s creditworthiness, such as employment history and income, instead of relying solely on credit history. However, these loans may be more expensive and carry higher risks for the lender, which is why they often come with higher interest rates and fees. Some direct lenders also offer guaranteed installment loans for bad credit direct lenders only with no credit check.
It’s important to be cautious when considering a no-credit check loan. Make sure you understand the terms and conditions of the loan, including the interest rate, fees, repayment schedule, and any potential consequences of default, such as wage garnishment or seizure of assets.
If you have bad credit and need an installment loan, it may be better to work on improving your credit score or finding a lender that specializes in serving borrowers with poor credit, rather than taking out a high-cost no credit check loan.
Alternatives for Installment Loans for Bad Credit
Installment loans have their own advantages and disadvantages. If you think that an installment loan is not a good option for you are looking for alternative options to an installment loan, you can consider the following alternative options:
1. Secured Loans
Secured loans are basically those loans where you need to submit security to the lender in order to get a loan. In case you fail to repay the loan on time, the lender can keep your collateral or security. Secured loans such as a home equity loan or a car title loan, require you to put up collateral to secure the loan.
These loans may have lower interest rates and be more accessible to borrowers with bad credit, but they also carry the risk of losing the collateral if you’re unable to make the loan payments.
2. Payday Loans
As the name suggests, payday loans are basically those loans that help you survive until your next payday. These are short-term loans that are typically due on your next payday. They may be easier to obtain than installment loans, but they also come with high-interest rates and fees and can be difficult to pay back. You can easily get payday loans online with same-day deposits from direct lenders as well as money-borrowing applications.
3. Personal Loans from Friends or Family
If you have a friend or family member who is willing to lend you money, this may be a good option. However, it’s important to treat this type of loan just as you would any other loan, with a written agreement and clear terms for repayment. Also, make sure that you repay the money as soon as you can, otherwise, it can lead to an internal conflict.
Crowdfunding allows you to solicit donations from friends, family, and the general public to help you reach your financial goals. This may be a good option if you are stuck in a medical emergency and need some money urgently.
5. Debt Management Plan
If you’re struggling with debt, a debt management plan may be a good option. This type of plan involves working with a credit counseling agency to create a budget, reduce your debt, and make payments on your behalf. This can prevent you from getting a loan and help you manage your loan and expenses with your current salary.
But, before choosing an alternative to an installment loan, it’s important to carefully consider your options and understand the terms and conditions of each option, including any potential risks and benefits.
FAQs: Frequently Asked Questions
Q1. What credit score do you need for an installment loan?
It totally depends on the lender. If you are getting an installment loan from a bank or credit union, you will need a credit score of at least 650 points. But online lenders offer installment loans for bad credit or no credit history as well. Some lenders even offer guaranteed installment loans for bad credit direct lenders only.
Q2. What are the three types of installment loans?
The 3 types of installment loans are
- Weekly installment payment loans
- Monthly installment payment loans
- Yearly installment payment loans
These loans can be both secured and unsecured. The most common examples of installment loans are auto loans, student loans, personal loans, mortgages, etc.
Q3. What happens if you pay off an installment loan early?
If you pay off an installment loan early, it allows you to get rid of the loan before its actual time. Here, you end up paying lesser interest. It also boosts your credit score. But here you need to be cautious because some lenders might charge an extra fee for prepayment. If you have taken installment loans bad credit, a prepayment can be very helpful for you.
Are Installment Loans for Bad Credit Worth It?
If installment loans for bad credit would be worth it for you or not, totally depends on how you manage the loan. If you are careful from the very first step of selecting the right loan for yourself and paying all the installments on time or before time, an installment loan would be completely worth it for you.
Before taking out an installment loan, it’s important to carefully consider the terms and conditions, as well as your own financial situation and ability to make regular payments. If you’re struggling to manage your finances or already have high levels of debt, an installment loan may not be the best solution.