By definition, an installment loan is one that has a set schedule of regular payments to be made back to the lender over a period of time. A mortgage is an example of this type of loan. The term of the loan won’t necessarily matter, but there are both short term as well as long term installment loans.
A bank is usually the typical lender that will issue these types of installment loans. This doesn’t always mean that there aren’t other options for a consumer based loan, but may represent a better option when considering what type of financial needs you may have.
Credit cards are not necessarily an example of this type of financial instrument simply because these are not paid off with anything but a monthly minimum at the least and paid in full at the most. There is no set schedule agreed upon with a credit card “loan”. The credit card loan would be more akin to a line of credit.
Installment loans will usually require a purpose that the lender will review. This may go through an underwriting department and involve some review the type of funds requested compared to the purpose for which they are requested and the ability of the individual or entity to pay back the debt. This is all normal process and procedure in the banking industry. As they seem to live by the mantra of “risk vs. reward”, they will not extend themselves beyond a certain capacity of risk without increasing the potential reward including an extensive amount of collateral against the loan.
These will typically have a better rate and in the end be a “safer” loan that your typical payday loans or short term loans for cash offered by these payday loan institutions. The interest rate charged by some of these payday loans is so high that the percentage of default on these loans is also very high. There are collection agencies that will pursue those who default on these loans and the word “relentless” comes to mind when thinking about how these collection agencies work.
So, whether you’re after a short term loan and considering a payday or even an installment loan, you may seriously think about considering what you “need” this money for before going down this road. If you’re deluding yourself that you can’t wait for whatever it is until your next payday, think again.
I won’t pretend to know exactly what you’re going through financially as I know some times can be tough, but depending on what you’re using the money for, it may very well cost you much more in the end. Just something to consider. This opinion reflects a bit more on the side of the payday loans vs. the installment loans. Even then, however, you should strongly consider what you’d use an installment loan to accomplish as the bank will for sure want to look into that as well and if you don’t have a plan on how you’ll pay the bank back, you’ll never get the funds in the first place.
There are not too many options for bad credit installment loans. It simply isn’t something a bank or traditional lender will consider as the credit score itself often reflects the type of financial management skills of the individual. That said, there is more to a credit report than the score alone. You may be able to justify specific things on a credit report to the point where you may actually qualify for one of these personal installment loans.
Installment loans for bad credit typically won’t have the same chance of being approved all things being equal for someone with good credit. There are options for credit repair that may help you. And there is usually much more to a loan than just the credit report or score of the individual or entity applying for the funds.
Although my advice still is to avoid the payday loan places, there are options that they have for installment payday loans as well. These won’t be pretty and unless you evaluate the financial liability on your part, you may have a difficult time taking the emotion out of the decision, which may be the only thing that will keep you from making a huge mistake.
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