Personal installment loans are loans borrowed from a bank, online lender, or other financial institution, for personal use. You usually pay the loan back in fixed installments (usually monthly payments). The total cost of such a loan includes interest and other fees.
These loans can either be unsecured, which means that you don’t need to offer up collateral like your house, or secured, which does require collateral. Lenders typically don’t restrict you on how you can use the loan. This form of lending is also accessible to a wide variety of people.
If possible, it’s wise to try to boost your credit score before applying for a loan, since the interest rates, terms, and principal amounts for unsecured loans are mostly based on your credit score. With an excellent credit score, you’re more likely to get lower interest rates.
You can improve your credit score through strategies such as reviewing your credit report for any errors, and making timely payments on your credit card.
If you have a poor credit score, another option to improve your chances of getting a low interest rate is to bring along a cosigner. A cosigner is someone with a good credit score who will repay the loan if you default.