Are you looking for an article with information on bad credit installment loans in Indiana? Then you are one lucky Hoosier!
Indiana residents have all types of reasons for taking out personal loans. But whether it’s for the car of your dreams or to fix a financial emergency, there are installment loans in Indiana that are right for you. Here’s what you need to know!
Indiana: The Basics
Indiana is a state in the midwestern United States. Before becoming the 19th state in 1816, Indiana was in a region of the “New World” heavily fought over between Britain and France.
Indiana is home to over 6.7 million residents, making it the 17th most populated state in the country.
10 Largest Cities in Indiana
1. Indianapolis 887,232
2. Fort Wayne 276,286
3. Evansville 117,817
4. Carmel 104,918
5. South Bend 102,136
6. Fishers 99,116
7. Bloomington 86,987
8. Hammond 74,812
9. Gary 74,217
10. Lafayette 70,697
Indiana: The Economics
Like many Midwestern states, Indiana has a historically diverse economy in agriculture and manufacturing. Indiana has an average unemployment rate of 3.4 percent—below the national average of nearly 4 percent. Its highly-skilled labor force makes the state a leader in exporting auto parts, pharmaceuticals, industrial machinery, and medical equipment.
Installment Loans in Indiana
Whether it’s for medical bills, car repair, or any other emergency, many of us will need a personal loan at some point in life. If you are a resident of Indiana and need some extra money in your bank account, installment loans can help you accomplish your financial goals.
What is a Personal Installment Loan?
A personal loan is a loan that you can get to use how you see fit. Personal loans typically come in installment loans—loans that borrowers repay with regularly scheduled payments.
Personal loans are some of the more versatile loan options available. They can come in any amount, with varying interest rates and loan terms based on factors like your past financial behavior and your ability to repay the debt.
Secured Installment Loans vs. Unsecured Installment Loans
Before you sign up for an installment loan, knowing the differences between unsecured and secured loans is essential. While both options help individuals pay off debt, they have different Underwriting requirements.
A secured loan requires the borrower (you) to provide collateral. Collateral is property, such as a home or a car, that has value. The lender can seize the collateral if the borrower defaults—or fails to make payments. Your collateral gives the lender some added security against default. Because of that security, these installment loans often have lower interest rates and extended repayment terms.
An unsecured loan is not backed by collateral. Unsecured installment loans are determined by a borrower’s creditworthiness and history with debt. While these types of loans have a lower risk for the borrower, they are much riskier. That means that unsecured installment loans are somewhat easier to get but more expensive than secured installment loans.
Payday Loans
Payday loans are high-risk loans designed to be a short-term solution to a short-term financial problem. However, these loans can be an expensive, complicated financial headache that’s tough to eliminate.
The reason that payday loans are so popular is that they are straightforward to get. You can get a payday loan at a physical store or use a lender that offers online installment loans.
Payday loans are essentially no credit check installment loans, making them one of the few bad credit loans available. You would only need a proper ID, proof of employment, and a valid bank account to get one.
Even though a payday loan is easy to get, it doesn’t mean it’s an ideal option. With average annual percentage rates (APRs) of over 400%, these installment loans have short loan terms that are almost impossible for the average borrower to repay on time. You are essentially forced to take out another loan to repay the original loan when you can’t repay it. This process repeats itself until your balance is cleared. The added interest and fees can leave you owing far more than you borrowed.
Personal Loans and Your Credit Score
In most cases, your current financial status determines what kind of loans are available to you. Your credit score is a tool that helps lenders evaluate that status.
What is a Credit Score?
Credit scores tell lenders how likely you are to repay your loan. These three-digit numbers can play a significant role in deciding whether or not you are approved for a loan.
- 300–499 Very Bad Credit
- 500–600 Bad Credit
- 601–660 Fair Credit
- 661–780 Good Credit
- 781–850 Excellent Credit
The higher your credit score is the lower your risk to lenders. That’s why “having good credit” will mean more loans available to you with low-interest rates and longer loan terms. On the other hand, people with bad credit have shorter loan terms and high-interest rates.
Where Does Your Score Come From?
Credit scores come from credit bureaus—data collection agencies that analyze consumer buying behavior. In their credit reports, the bureaus examine your behavior in these five areas:
Payment History
Payment history is the record of delinquent payments to your creditors. Your payment history has the most significant impact on your score.
Credit Utilization
The percentage of your available credit you are currently using. The lower your credit utilization, the higher your score!
Credit History
The length of time you have maintained a line of credit. An older credit age positively reflects a person because they are more likely to manage their finances well.
New Credit
Hard inquiries into your credit history measure your attempts at credit. Every hard inquiry will slightly drop your score.
Credit Mix
The variety of secured and unsecured credit you successfully manage. A good credit mix shows a borrower handling credit card debt and personal loans.
Transunion, Equifax, and Experian are the three major credit bureaus that report on your credit. Since they are three separate bureaus, they create separate credit reports and credit scores. Be sure to check your credit so that you can correct errors on your report that can hurt your score.