Installment Loans

Most people will end up needing additional funds at some point in our lives. While some people don’t like the idea of borrowing, others realize how helpful taking out a loan can be, especially when you’re hit with unexpected expenses. With the proper information, the chances of getting a better deal are higher, so make sure you’re well informed before deciding to take out a loan. 

Installment loans are typically considered one of the most helpful loans you can opt for, and they’re something you should consider if you’re thinking about a home renovation, paying for a wedding, or getting a new car.

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What Is an Installment Loan?

An installment loan is one of the most popular types of loans, that involves borrowing a certain amount of money, and repaying it with interest over a series of fixed payments called “installments.”

These payments are usually made monthly, but they can be made weekly, bi-weekly, or on a different schedule that is determined before taking out the loan.

Installment loans are mostly used to cover mid-to-high expenses such as buying a new house or vehicle. These costs are usually too much to handle at once, so getting an installment loan and spreading payments out over an extended period can make them more manageable.

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Common Types of Installment Loans

Installment loans happen to be some of the most common types of loans available:

Car loans are used to purchase a new vehicle. Monthly installments are usually paid over 12 to 96 months, although not all lenders issue loans within that range. If you fail to maintain the repayment schedule, your newly purchased vehicle acts as collateral, and the lender may repossess it.

Mortgages are installment loans used for buying a home. They are usually repaid over 15 to 30 years with monthly payments. Like with car loans, your property acts as collateral in case you can’t make the monthly payments. Mortgages usually come with lower interest rates since they are considered secured, and some even have fixed rates that don’t change over time.

Personal loans can be used for a variety of purposes, like debt consolidation or paying off sudden unexpected expenses like medical bills. They don’t require collateral like your car or house, but they come with slightly higher interest rates.

 

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How Do Installment Loans Work?

Lenders need some kind of insurance that you’ll be able to pay back the borrowed amount, which is why some loans require collateral. Most lenders also require that you have a job or some other form of income, to ensure that you’ll be able to pay each installment.

Depending on the lender, you can make payments through automatic monthly deductions from your bank account, direct deposit at the store, or over the phone.

Paying off each installment on time will help you improve your credit score, which can come in handy the next time you’re taking out a loan. A higher credit score means that you can borrow a higher amount or negotiate a better interest rate.

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What to Consider When Getting an Installment Loan

Getting an interest rate that allows you to make affordable monthly payments should be a priority when taking out an installment loan. Lenders consider many factors to calculate their risk and give you a specific interest rate based on your credit score, income, and other debts. The top priority for lenders is making sure that you can repay the loan.

Interest rates and terms for the loan will vary depending on your credit history and the specific lender. Short-term loans typically yield higher interest rates than long-term loans. But if you can pay off the loan early you can avoid additional interest. 

That is why it’s crucial to evaluate your financial situation and figure out what works best for you. Some people want to repay the loan as soon as possible, while others like to stretch it out for smaller payments over time. Whichever you choose, make sure it fits your budget, and has a payment plan you’re comfortable with.

Keep in mind that the borrowed amount is fixed, although you may be able to refinance your loan to receive additional funds and a new interest rate. CreditNinja doesn’t have penalties for repaying your loan early, although some other lenders might charge you additional fees. CreditNinja also typically allows installment borrowers to refinance.

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Benefits of Installment Loans

Installment loans are a great way to improve your current financial situation, and potentially increase your credit score. These loans usually come with a simple borrowing process, fixed payments, and clear terms. 

At CreditNinja, we offer reliable financial support whenever you need it. Our installment loans come with flexible terms and can be used to improve your financial situation quickly. Get your cash as soon as one business day after being approved, and get your finances back on track.

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¹Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications approved before 10:30 a.m. CT Monday – Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case, the loan if approved, will be funded the business day after such additional verification is completed.