Best Installment Loans Online

When you start the search for the best installment loans available today there are quite a number of factors to take into consideration. But as someone who’s taken out a number of these in the past, and done a lot of research as well, I’m in a great position to guide you.

Best Online Lenders for Installment Loans

  • Day of Grace: 10 days
  • Annual income of $20,000
  • Min credit score of 580
  • Administrative fee: 4.75%
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  • Failed payment fee: $15
  • Day of Grace: 3 days
  • Grace period fee: $25
  • Admin. fee: 0.99% - 5.99%
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  • Accept Co-signers
  • Hardship plans
  • Credit health tool
  • Min credit score of 600
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What is an installment loan?

Now the first thing to do is to explain what the best installment loans are. As the name suggests, they’re loans that are repaid in a number of equal installments over an agreed period of time. This may be as short as year or up to 30 years or more for long term investment loans in the case of home mortgages.

Throughout the agreed loan period the interest rate will stay the same if you’ve taken a fixed rate option or it may go up and down if it’s a variable one instead. Many people opt for the former because it lets them budget with confidence that they’ll always know exactly how much they’ll have to pay each month.

There are also secured and unsecured installment loans. The former will need some collateral like a house or an auto as security while for the latter you may need a good credit history.

All About Personal Loans

Personal loans are designed to help borrowers fulfill personal aspirations and goals. People apply for personal loans for reasons including:

  • Covering emergency financial needs
  • Going on a vacation
  • Marriage expenses
  • Discretionary expenses

Personal loans are generally unsecured, meaning you aren’t required to pledge collateral to secure the loan amount. However, because these are unsecured loans, they often come with higher interest rates.

Personal loans are quite different from payday loans for many reasons. Payday loans have an extremely short repayment cycle of a month whereas personal loans can stretch up to 5 years or more. Moreover, personal loans generally feature lower interest rates than payday loans.

If you have a good credit history, you can get a personal loan quite easily. However, approval times are longer than payday loans. Additionally, if you have a bad credit score, your interest rate might be significantly higher.
Since personal loans have attractive payment schedules and interest rates, most people prefer these for medium-term financing over credit cards.

Key benefits:

  • Versatile for multiple uses
  • Monthly payments are constant throughout the loan’s life
  • Many lenders offer personal loans, so you can shop for competing offers
  • While you need to have a good credit score, excellent credit is not required
  • Great option for debt consolidation

What To Know About Mortgages

A mortgage is a specialty type of loan secured by collateral, which in this case is a property. Borrowers are required to pay the required principal and interest within a calculated period of time or risk their home being foreclosed upon by the mortgage lender.
Below are some of the most common forms of mortgages (direct lender or online mortgages) , but there are many types available:

  • Fixed Rate Mortgages - The interest rate is fixed and monthly payments are the same over the life of the loan.
  • Adjustable Rate Mortgages - The interest rate of this mortgage can fluctuate higher or lower depending on market conditions.
  • Jumbo Mortgages – This is a special mortgage type for home prices that exceed conventional loan limits.
  • Speciality Mortgages – There are many types of specialized mortgages including Federal Housing Administration and Veterans Affairs loans which are guaranteed by the Federal Government.

Auto Loans

When you want to finance a new or used car, an auto loan can help. Auto loans are secured loans because the vehicle is pledged as collateral. If you default on a car loan, your vehicle will be repossessed by the lender.

  • Banks usually offer loans up to 90 % of the on-road amount for new cars and 85% if the vehicle is used
  • Your car is pledged to the lender as a collateral
  • The payment period usually ranges from 12 to 84 months

Student Loans

To finance educational initiatives, some borrowers take on student loans. If financial aid isn’t enough to cover your university expenses, a student loan, whether public or private, could help.
To determine your eligibility for a student loan, you can fill out the FAFSA form. This form is designed to see who qualifies to receive Federal student aid. You can also apply for a private student loan from banks and other financial institutions.

How Installment Loans Work

Every installment loan has certain key characteristics including:

  • Payments made at regular intervals
  • Fixed payment duration as short as one month or as long as 40 years in some cases
  • Principal amount
  • Interest amount with an interest rate that can be fixed or variable

Calculate your monthly installment with the following formula:

P is the Principal or loan amount, R is the monthly rate of interest, and N is the number of months.

For example, if you have taken an auto loan of $1000, the monthly rate is 0.001 and N is 36, you can calculate your EMI as’

EMI = [1000 x 0.001 x (1+0.001)^36]/[(1+0.001)^36-1]

If it’s a home loan of $100,000, the formula would be

= [100000 x 0.001 x (1+0.001)^36]/[(1+0.001)^36-1]

What to consider before taking an installment loan

You’ll have a number of considerations to bear in mind when you start looking for your best installment loan and these are going to vary with your circumstances.

  • Firstly, how much can you easily afford to borrow? Using a loan calculator will help you work out repayments.
  • Do you want one which involves lots of form filling or would an installment loans online option be better for you?
  • Might you be able to pay the loan off early? If so, look for the long term investment loans that have lower charges for doing this.
  • If your credit history’s not great then maybe long term installment loans with no credit check might be a good option.
  • Alternatively, think about getting a co-signer with a better credit history than you.
  • Finally, take a look at your credit score. The better it is, the lower the interest rate you could pay.

When Someone Would Go For An Installment Loan

Installment loans are especially useful for covering a specific financial need. However, as with any loan, you’re required to pay the principal and the interest back over a predefined period.

Before applying for a loan, determine the actual amount of money that you need.

Here are some situations where an installment loan is beneficial:

  • You’re a salaried employee with a monthly income of $3,000. You want to buy a house worth $150,000, but with your existing salary, this is unobtainable. Accordingly, you can approach a bank for a mortgage loan.
  • You want to buy a new car, but don’t have the required cash to buy it outright. In this case, you can apply for an auto loan from an alternative lender.
  • If you’re an entrepreneur or a business owner, you may need a loan to finance expansion or cover cash flow deficiencies, and peer-to-peer lending may provide a worthy solution.
  • Personal loans help you finance your vacation, marriage expenses, or settling your other outstanding debts. Seek out online lenders to compare rates
  • To cover the costs and expenses of an educational degree, check out the FAFSA form and lenders that specialize in private student loans.

How to get an installment loan in 8 steps

Once you’re sure that personal installment loans are the way to go there are eight simple stages to get through. Take each one in turn and, before you know it, the money could well be in your checking account.

  1. Check your numbers. When you take out an installment loan you’re making quite a commitment so you need to make sure you’ve done the math in advance. Work out your monthly income and outgoings and see just how much cash you have left over for the repayments. This is something the lender is probably going to ask you about, so you best be prepared.
  2. Check your credit score. Credit scoring is going to dictate the interest rate that you’re going to pay and it will even be used to decide whether you get a loan or not. So it’s a good idea to look into it well in advance. Alternatively, looking for online installment loans with no credit check might be another way to go.
  3. Check your options. Even though you’re planning to apply for the best installment loans that you can find, maybe there are other options. For example, it might be that you have some savings that you might be better using, especially as interest rates for savings aren’t that great right now and don’t look like they’ll be improving any time soon.
  4. Choose the type of loan that you’d like. Are you going to go for a fixed rate loan or a variable one? And do you want an online installment loan where everything can be sorted out from the comfort of home or would you prefer to arrange one face to face? Maybe you’d like an installment loan with no credit check – but be aware that the rates may be higher.
  5. Check out the best rates. Next, it’s time to start looking around for the best rates you can find. Depending on your individual circumstances these can vary greatly so make sure that you find the best ones that are going to mean the lowest possible repayments for you.
  6. Choose a lender and apply. Once you’ve made your choice it’s time put in your application for the best installment loan that fits all your criteria. You’ll find plenty of help online to assist you in making your choice.
  7. Provide all the necessary documentation. As well as carrying out a credit check on you the lender may well want documentary proof of income and address like paychecks and utility bills so be prepared to supply them.
  8. Accept the loan and start the payments. You’re there. Once you’ve accepted the installment loan offer all you need to do is use the money however you want and start to make your payments according to the schedule that you’ve agreed.

Installment loans vs. payday loans and credit cards

The difference between them is, that installment loans are only one of the ways that you can borrow money. With payday loans you borrow, but usually over a shorter period and for a fixed fee that’s added to the loan amount. With credit cards you are free to borrow when you like, within your credit line of course, and payments go up the more you borrow. But the best installment loans offer you the peace of mind that repayments are spread over a longer period and stay generally the same throughout it.

What are the rates and terms of an installment loan?

As we’ve mentioned, the rate of even the best installment loans can vary due to a number of factors including loan amount, purpose and your credit history. The terms are equally flexible but generally range from around 3 to 6 years. It all adds up to a financial commitment that you can tailor to meet your individual circumstances

What are the advantages of online installment loans?

As you’re reading this online you may already have worked out that the online installment loan has a number of advantages. All the same, let’s go through them briefly.

  • Convenience.

What could be easier than arranging your loan from the comfort of your own home? No visits to the bank needed and the forms are easier to fill in online too.

  • Competitive Rates.

There’s a very good chance that you’ll find the best rates online. That’s because online lenders have lower overheads so they can give you better value.

  • Easier Approval.

When you apply online you won’t just find that there’s less paperwork to complete, you’ll also be find that with online installment loans instant approval is often possible. And when you’re keen to get things moving that’s exactly what you’ll want.

Read more about the pro's and con's of installment loans

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