According to recent statistics, the average American has approximately $38,000 in personal debt. This figure excludes home mortgages. It’s a statistic that shows just how short on cash people in the country are.

But even if you are among the 29 percent of the country’s population that is financially healthy, chances are you’ll still need to borrow money at some point. A sudden, unexpected emergency, for instance, may require you to get a loan when your emergency fund is insufficient to shoulder the needed amount.

When in need of money, getting an installment loan is a great idea. In today’s post, we tell you all you need to know about installment loans and why they may be the ideal financial solution for you.

What Is an Installment Loan?

The term “installment loan” is a broad, general term referring to a variety of personal and commercial loans that must be repaid through regularly scheduled installments or payments. Once you’ve borrowed the cash, you pay it back in smaller chunks on a weekly, monthly, quarterly, semi-quarterly, or annual basis until its maturity date.

Some of the most popular types of installment loans include mortgages, auto loans, student loans, and personal loans. Almost all types of installment loans have a fixed rate, which means that the interest you pay over the loan term is fixed at the time of borrowing. 

How Do Installment Loans Work?

Before getting an installment loan, it helps to know how these loans work so you can know what to expect. The lender will provide you with a fixed amount of money that you must repay with regularly scheduled payments. Every payment you make is a repayment of a portion of the principal amount your received plus interest on the debt. 

Your lender uses several variables to determine the amount of each payment you’ll make on a regular schedule. These variables include:

• The amount of the loan you borrow
• The length of the loan term
• The interest rate charged to you

Once the regular payment amount is set, it typically remains constant throughout the term. This makes it easy for you to budget in advance and avoid missing payments.  

Why Get an Installment Loan?

Now you know what an installment loan is and how it works, it’s time to look at why these loans are so popular among borrowers. Here are six top benefits of installment loans.

1. Application Is Hassle-Free

If you’ve ever applied for a loan before, then you know the process can be time-consuming and complicated. One of the biggest installment loan benefits is its ease of application. This is especially the case with online installment loans, whose entire application process is quite convenient and straightforward.

When you’re applying for the loan online, you can do everything on your smartphone in the comfort of your office or home. Many lenders provide an application form online for borrowers to fill out with the required information. Once you’ve completed the application form, you can sit back and wait for the loan to be approved.

2. You Get Fast Cash

Another good thing with installment loans is that you get the money you need quickly. Once you’ve submitted the application form, you’ll receive a notification about the status of your application in just minutes.

If your application is approved, you can expect cash in your account the same business day or the next. This loan is thus perfect when you need money for an emergency. 

3. There Are No Strict Requirements for Approval

One of the most important factors banks and credit unions look at when deciding whether to approve you for a loan is your credit report. A poor credit rating can be a huge hindrance to your ability to get a loan from these institutions.

One of the best things with online installment loan lenders is that you don’t necessarily need an established credit profile or credit score to qualify for a loan. Even borrowers with imperfect credit profiles can get approved.

Most of these lenders don’t even perform credit history checks. As long as the lender sees you have the ability to pay what you owe, they’ll approve you for the loan, regardless of how your credit rating looks like.

4. There’s Ease of Repayment

Installment loans have manageable repayment fees and schedules. The schedule of your installment payments will depend on the amount you borrow. You can choose to pay weekly, monthly, and so on, depending on what you agree with your lender.

To help make it easier for you to make payments, your lender matches the loan amount they’re approving you for with the volume and frequency of your income.

5. The Loan Amount Is Flexible

The amount you can qualify for when applying for an online loan is quite flexible, which means you can get the amount of money you need to deal with your emergency. For some online lenders, installment loan amounts range from $100 to $1,000.

Other lenders may be able to approve much higher amounts, especially for loans that have longer terms. For borrowers who don’t want to have several loans at the same time, installment loans may be a good option due to the larger loan amounts one can take out.

6. There’s a Rollover Option

Ideally, you want to repay any loans you have at the scheduled end dates. But life happens, and you may find yourself in a situation where you can’t pay your entire loan amount on time.

Thankfully, most online installment loan lenders give you the option to roll over the loan. In other words, you have the option to extend the repayment period. Doing so does not only give you more breathing space but also saves you from getting negative information on your credit profile.

An Installment Loan May Be the Solution to Your Financial Need

Anyone can encounter a situation when they need to borrow money. When that time comes, getting an installment loan makes a lot of sense. These loans are not only easy to apply and qualify for, but they also guarantee fast cash when you need it the most.

Are you interested in a quick, hassle-free installment loan? Please, contact us today and learn about our offers.