Payday loans are a great way to get the small loan that you need, tiding you over until your next payday. However, there are some instances in life where you need a much larger loan or need an extended period to pay the loan back. That’s where a personal installment loan comes into play.
The Qualification Requirements for an Installment Loan
The beauty of most personal installment loans is that there is no collateral necessary. So to be eligible, you need an active checking account, be a U.S. citizen or permanent resident, at least 18 years old, and able to prove proof of employment (typically a paycheck stub).
Your credit will be evaluated as well as your current income to determine how much you’d be eligible to borrow. Each state determines their minimum and maximum loan amount.
If you qualify and are approved, the lender will deposit the funds into the checking account you provided them with. The process can be done anywhere from a few hours to the next business day.
Borrowing Limits for an Installment Loan
A personal installment loan has more flexible borrowing limits when compared to short term loans. You can borrow anywhere from $500 up to $5000. It will be based upon your income and credit, but you are not subject to apply for multiple loans in order to get the actual cash you need.
The Costs of an Installment Loan
For most installment loans, you’ll have a fee and interest charge. Be sure to get a copy of the full disclosure of rate information from the lender you select. This includes information regarding their lending practices as well as a detailed explanation of how fees and charges are assessed per the state.
Repaying an Installment Loan
When signing your agreement for the repayment terms of your personal installment loan, most lenders will set the payment schedule according to your paycheck date. This is not a payday loan account though. It’s just for your convenience to ensure the payment is made on time.
Most personal installment loan lenders will also require that they auto draft from your personal checking account. It’s important to ensure you have this amount in each month at the scheduled time.
Those are the steps to applying and paying your personal installment loan back. Do be sure you’re taking it out for the right reasons, so you don’t get overloaded with unnecessary debt.