An installment loan is a common financial product that you should be familiar with. If you ever intend to buy a home, a car, or take out a personal loan then you’ll need to know how they work. There are many different loans out there. Knowing the differences could save you time and money in the long run.
With so many different financial products available to you, it’s important to know the distinctions between them. Doing plenty of research on loans and lenders is the best way to make sure you’re getting the best deal possible.
What Is An Installment Loan?
An installment loan is an unsecured loan. This means that they don’t require any collateral. A secured loan would require collateral from the borrower. With an installment loan, in most cases, borrowers can get one based solely on their promise to repay.
They’re called “installment” loans because they are repaid through monthly payments or “installments.” Basically, any loan that a borrower repays over time through monthly payments could be considered an installment loan.
These loans will vary in size, repayment terms, fees, and interest rates. Depending on the type of installment loan you choose, you may be repaying it for a couple of months, up to several years. And because there are so many different loans, the requirements for getting one will depend on the type of loan, and the lender in question.
Types of Installment Loans
There are many different types of installment loans, some of which you’ve definitely heard of before. Here are a few of the most common types:
Personal Installment Loans
This type of installment loan is a personal loan that acts as an alternative to high-interest small-dollar loans like title loans or payday loans. Borrowers with poor credit histories tend to use these personal loans to get the extra cash they need for things like car repairs, medical bills, children’s school costs, and other unexpected expenses.
CreditNinja offers personal installment loans designed to help borrowers in need. If you’re currently struggling financially, consider a personal installment loan from CreditNinja.
An auto loan is exactly what it sounds like: a loan for purchasing a vehicle. Because cars, trucks, SUVs, and motorcycles are so expensive, many people need to use a loan to purchase them. Any auto loan you get that is repaid over the course of several years would be considered an installment loan.
Many people get their loans through the same dealership that sold them the vehicle. While this is the most common situation, you can still search for financing through a bank, credit union, or other lenders. Make sure you do plenty of research to find the best interest rate for your loan.
A mortgage—or home loan—is an installment loan used to purchase a house, condo, or another type of home. These are some of the largest installment loans that exist. Homes are very expensive investments, and as such, they’ll require a large loan.
Mortgages are paid back in monthly installments, usually over the course of either 15 or 30 years. Make sure you do your homework before choosing a lender for your mortgage. The interest rates for these loans will fluctuate depending on the housing market.
A student loan is an installment loan used to pay for college, or some form of higher education. They come in a couple of different forms, such as federal student loans and private loans. These loans tend to carry low interest rates, but it may take borrowers a longer time to pay them off depending on the size of the loans.
Online Installment Loans
The great thing about most of these is that many of them are available online. Lenders, like CreditNinja, are starting to offer fully-online experiences from the application to funding, to repayment.
With online loans, it’s more important than ever to properly examine each and every lender you’re considering. Read online reviews of the lender, check their website to make sure it seems legitimate, and call them to ask questions.
Being able to get a loan and repay it from the comfort of your home is a great thing, but be cautious and do your best to avoid scams and predatory lenders.
Installment Loans for Bad Credit
CreditNinja is a premier online lender, offering safe and affordable personal installment loans. Our loans are designed for borrowers with less-than-perfect credit scores. So you won’t need a perfect borrowing history to get one.
If you’re in need of some quick cash and you’re not sure where to turn, CreditNinja is here to help. Apply today to get a better personal loan, and get your finances back on track.