If you need a cash loan to deal with a large expense, installment loans should be the first option on your radar. This form of lending provides you with a lump sum of money upfront that can usually be repaid in scheduled monthly payments over a fixed period of time. This makes them well-suited for funding car repairs, education fees, medical bills, home improvement projects, etc.
Essentially, you can take out installment loans online from USInstallmentLoans and use them in any situation where you need cash. And since they often come with relatively low-interest rates and fixed repayment periods compared to credit cards, they can even end up saving you more money in the long run.
However, before you decide to borrow an installment loan, it is essential that you take the time to understand the benefits and drawbacks of these loans. By doing so, you will be able to pick the right form of lending that suits your budget and needs, so make sure to keep reading to learn everything that you need to know.
How Installment Loans Affect Your Credit Score?
The first thing that you need to keep in mind is that most lenders will usually take your credit score into account when they are trying to decide whether or not to offer you a loan. Moreover, these scores will often influence the types of rates and terms that you end up being offered.
In this respect, one of the most important factors used when calculating a consumer’s credit score is their payment history. In fact, it usually accounts for about 35% of your credit score, and it usually shows lenders if you make payments on time or if you miss payments.
As such, whenever you are borrowing an installment loan, you need to make sure that you can afford to make the repayments on time. Otherwise, late payments or defaulting can negatively impact your credit rating, which will affect your ability to secure an installment loan in the future.
According to Owen Wilcox, the co-founder of USInstallmentLoans, “A good rule of thumb is to set up automatic payments with your lender, as this will ensure that the money is automatically deducted from your account on time every month without fail.”
Benefits of Installment Loans
Flexibility –
The good thing about installment loans is that you can use the funds for pretty much any purpose that you need. It could be for debt consolidation, home renovations, travel expenses, medical bills, etc.
And since there are a variety of installment loans to choose from, you can find the ideal one that is best suited to your budget and financial needs, eg. auto loan, mortgage loan, personal loan, etc.
Predictable repayments –
Installment loans will usually be repaid on a fixed schedule, e.g., monthly, and they tend to come with fixed interest rates. This means that you don’t have to worry about being surprised by your payment amounts or not knowing the end date of the repayment term. Plus, they are also easier to budget compared to other lines of credit that typically use variable rates, like credit cards.
Credit score building –
Installment loans can be a great way to boost your credit score since payment history typically accounts for about 35% of your FICO score. This means that as long as you keep making consistent, on-time payments, you can improve your credit rating over time.
Refinancing opportunity –
Installment loans allow you to consolidate high-interest debt and secure lower rates or better terms. This can be a great way to save yourself a lot of money in the long run and/or get a better handle on your finances.
Downsides of Installment Loans
High-Interest Rates –
The interest rate your lender offers you will usually play a big part in the overall cost of your loan. The higher the interest rate, the more expensive your loan will be in the long run.
This is a problem that most bad-credit borrowers tend to experience, and if you fail to make your repayments, it can end up sinking you into a vicious cycle of debt. Luckily, you can always compare loan rates and terms online via sites like USInstallmentLoans, which enables you to lock in the most competitive rates possible.
Hidden Fees –
Aside from interest rates, many installment loan providers tend to charge fees, and while some lenders are upfront about it, there are some lenders that can be sneaky by hiding them in the fine print of the loan agreement.
Some of these types of fees can include prepayment fees, origination fees, late payment fees, etc. It is for this reason that you should always read any loan agreement carefully before you decide to sign on the dotted line.
Limited Borrowing –
Unlike other forms of credit, installment loans do not allow you to borrow any more money until you have fully repaid the initial loan.
This means that if a financial emergency occurs, you have limited options available to you. It is for this reason that you should not take out an installment loan unless you are confident of the exact amount of money that you need.
Slow Application Process –
Installment loans tend to come with long, drawn-out application procedures, especially when borrowing from traditional lenders. This means that if you need the cash urgently, it can often take days to get your loan request reviewed.
You may also be required to submit a lot of paperwork to get approved for these loans or even wait in long lines at the bank or credit union.
Slow Funding –
Installment loans may also take longer to be processed, so even if you are approved for funding, there’s a good chance that you will end up waiting for some time before the funds can be used.
Luckily, you can use an online credit platform like USInstallmentLoans, where all approved loans are processed and deposited by the next business day. Plus, they do not require you to submit any lengthy paperwork or wait in long lines, either.
Best Way To Apply for an Installment Loan
There are a number of ways that you can apply for an installment loan, but for those looking to avoid long wait times and lengthy paperwork, using an online lending platform like USInstallmentLoans is the best option. The process is fairly simple, and you don’t even need to leave the comfort of your own home to get the funds you need.
To apply for an installment loan, you can follow the steps below:
Step 1: Fill Out The Online Form.
You simply head over to USInstallmentLoans.com and fill out the pre-approval form with your personal and financial details, e.g., name, address, social security number, credit score, bank account number, etc. Once you’re done, you can submit the form and wait for it to be reviewed.
Step 2: Review Loan Offers.
If approved, you will be presented with multiple loan offers from different lenders, each with its own rates and terms to consider. You can compare them until you find the one that is best suited to your budget and requirements. From there, you only need to e-sign the loan agreement, and the lender will start to process your funds.
Step 3: Receive Your Funds.
You can expect the lender to disburse your money via direct deposit, and in most cases, the money should reflect in your checking account by the next business day at the latest. This enables you to deal with any financial emergency right away instead of having to wait days for the money to be processed.
