If you encounter a sudden and unexpected expense that falls outside of your monthly budget cycle, taking out an installment loan may be the solution you are looking for. Different lenders will have different requirements when it comes to these loans, and the good thing is that most lenders will not be too discerning about your credit score. If you are thinking about taking out this type of loan product, this blog post will give you a closer look at installment loans and how they work.
Installment Loan FAQs
Can a borrower get an installment loan without a credit check?
Yes! Most installment loans do not require a credit check. This means that if you have had previous credit problems, you may still be eligible for this type of loan. However, most installment loans will require that you have a good, verifiable source of income. When they do conduct a credit check, it will be performed by a third-party company.
How much will the interest be on an installment loan?
Interest rates on installment loans can vary. It is a good idea to look at a few installment loans before applying for a loan. If possible, compare the interest rate and loan term to see which loan product will offer you the most savings.
How do these loans work for borrowers with poor credit?
Installment loans do not require a credit check. They account for a borrower’s income and other details. For borrowers with bad credit scores, a lender might assume higher risk and charge a higher interest rate.
What happens if I cannot make a scheduled installment payment on time?
Some installment loan providers operate on a Net-30 basis, which means that if you are late on a payment, you may be charged an additional interest rate of 1 percent. Other providers may increase your interest rate according to its terms.
What happens if I want to pay off my installment loan early?
Several lenders allow borrowers to pay off their installment loans early. Some lenders will charge a fee while others will not. Before taking out an installment loan, ask the lender about its policy on early payoff.
What are the pros and cons of installment loans?
One of the biggest benefits of taking out an installment loan is that it allows you to spread out your expenses and pay in small increments. Some people who take out installment loans say that the overall financing process was very smooth and helped them pay for unexpected expenses.
The downside of installment loans lies in how long it takes to pay off the loan. The lender will usually set up a schedule that allows you to pay in installments. The problem lies in when you will be able to pay off the loan. If you do not have a way to pay it off early, it could take a long time to pay it off.
There are many benefits to taking out an installment loan. If you are in a situation where you need extra cash in a hurry, the installment loan is an excellent option. Most installment loans can be taken out conveniently in the comfort of your own home. Most installment loans do not require a credit check. Some lenders even offer installment loans to borrowers with bad credit. If you are interested to know more about installment loans, contact an installment loan lender.
If you are looking for a reliable lender that offers installment loans in Bessemer, AL, come to the Bessemer Finance Company. We are located in the heart of downtown Bessemer across from the historic Bright Star restaurant. Let us help you get the installment loan you need today!