Things to Know About Bad Credit Installment Loans
Bad credit installment loans are long-term financial solutions for borrowers with less-than-perfect credit scores. They come with repayment periods of up to 60 months and offer amounts between $1,000 and $50,000. Unlike payday loans, installment loans are repaid in equal monthly installments, making them flexible and affordable.
As lenders don’t restrict the way you can use the loan, you can use the funds for almost everything, from covering medical bills to financing a vacation. Additionally, they usually come with simple eligibility requirements, straightforward application processes, and fast funding times.
However, there are some pitfalls associated with installment loans. While a longer repayment term results in a lower monthly payment, it also increases the total loan cost. Additionally, bad credit installment loans come with higher initial interest rates compared to traditional options. This creates several risks for people who already experience financial problems. Therefore, it’s recommended to approach them carefully.
How Much Does an Installment Loan Cost?
An installment loan cost is represented by the interest rate and additional fees. These two parameters form an annual percentage rate (APR) that shows how much you will have to pay for using the money within the whole year.
Although an APR on an installment loan is usually fixed, it’s not the same for everyone. The rate you get depends on your credit score, income, loan amount, the repayment period, the lender’s interest range, and even your location. On average, borrowers with good credit get APRs between 5.99% and 35.99%, while those with bad credit may be offered higher rates.
Representative Example
The table below shows the potential installment loan cost based on an APR, loan amount, and repayment terms:
| Loan Amount | Repayment Terms | APR | Monthly Payment | Total Loan Cost |
| $1,000 | 12 months | 15.99% | $90.73 | $1,088.77 |
| $5,000 | 24 months | 11.99% | $235.34 | $1,648.26 |
| $15,000 | 50 months | 8.99% | $360.8 | $18,039.83 |
The examples are provided for informational purposes only based on averages. Thus, the terms may differ from the ones you will be offered.
When Might You Need Personal Installment Loans for Bad Credit?
Personal installment loans for bad credit can be used for a vast range of needs. The most common purposes include:
- Paying medical bills;
- Fixing car breakdowns;
- Making debt consolidation;
- Financing the vacation;
- Making home improvement;
- Covering other personal needs.
However, you also need to consider your ability to repay the loan before going into debt. There are several extra rules you need to follow to make sure an installment loan suits you:
- You have a clear loan purpose that can’t wait until you save money for it.
- You are capable of repaying the funds on time.
- You don’t need to sacrifice your basic needs to make your monthly payments.
- There are no cheaper alternatives, such as secured loans, available to you.
What Do I Need to Get an Installment Loan with Bad Credit?
Each lender can set its own requirements as long as they follow federal and state law guidelines. However, there are some basic criteria that are usually common for all loan providers:
- Reach the age of majority in your state;
- Have an active bank account;
- Provide income confirmation;
- Be a US legal citizen.
Additionally, lenders require you to provide your personal and financial details when filling out a loan application form. You may also be asked to meet certain credit score and income requirements, as well as demonstrate a low debt-to-income ratio.
Find The Best Installment Loan Lenders in 4 Steps
You only need to take three simple steps to find the best installment loan lender for your specific situation:
FastLoanAdvance loans may provide a lifeline for bad credit borrowers who face unexpected expenses. Among their most noteworthy benefits are:
1
Fill out a simple online form in just 5 minutes.
2
Review loan offers and choose the one with better terms.
3
Complete final application.
4
If approved, sign a loan agreement and get your funds via a direct deposit.
Why Choose Us?
At Safety Lend, we help borrowers learn more about lenders they are going to deal with and compare loan offers from multiple service providers. We charge no extra fees for helping you make an informed financial decision. Our reviews are independent and not sponsored by any lender observed on the website. We stand for transparency and put your trust above financial gain. Save your time and effort by filling out just one simple form and focus on what is really important.
FAQ
What Is a Personal Installment Loan?
A personal installment loan is a flexible financial solution available to borrowers with any credit. It comes in the form of a lump sum deposit and is repaid in equal monthly installments.
Can I Get an Installment Loan with Bad Credit?
Sure, it’s possible to obtain an installment loan with bad credit. Many online lenders set no minimum credit score requirements. However, their options tend to be more expensive.
How Can Safety Lend Help Me Get an Installment Loan?
At Safety Lend, we provide detailed and independent information about different personal installment loan lenders to help borrowers find a perfect fit and avoid scams. We help bad credit borrowers make informed financial decisions by highlighting what to pay attention to when assessing lenders’ offers.
How Fast Can I Get an Installment Loan for Bad Credit?
Funding times may vary by lender. While many of them make direct deposits within one business day of approval, some loan providers need several working days to make a transaction.
What Are Installment Loan Repayment Options?
Installment loans are usually repaid in fixed monthly payments within up to 60 months. However, some lenders also offer bi-weekly repayment, too. The process is typically automatic. The lender will deduct money from your bank account on the agreed-upon date. Just be certain about having enough money in your account when the date comes.
What If I Don’t Repay My Installment Loan on Time?
Defaulting on your installment loan can lead to extra fees for late payments and not sufficient funds. On top of that, it can hurt your credit, resulting in difficulties with getting a loan in the future.