There is not much that you can complain about the name of installment loans; it couldn’t have been truer. Installment loans are just like what they sound: a financial obligation that is paid off via installments.
You borrow an amount of money that is paid by the means of installments over a period of time (alongside interest of course).
In most case, Installment loans come with a fixed interest rate, however, interest rates can vary depending upon the credit score and credit history of the applicant.
Most of the online installment loans today are offered through networks who work with more than one lender. These networks/online portals give applicants an interface where they request advances payable in the form of installments.
The providers who are associated with network review the loan application and approve it if they deem it okay. Other installment loans are offered directly by lenders who market their own products through web properties.
Here’s a list of some premium lenders who cater to a varied range of applicants, offering the best installment loans without the unforgiving APRs and unethical practices often used by some deceitful lenders.
Prosper may come up as a bit rigid as it doesn’t cater to people with poor/average credit scores. However, you can get installment loans at very competitive APRs that starts with 5.99% once you qualify for a loan.
At Prosper, you can borrow up to $35000, which is quite a good amount for personal installment loans. Prosper usually offers loan for fixed terms i.e. 3 yrs or 5 yrs.
You are free to choose between the two options; whichever fits the case for you. Prosper stand out from the lot with a very fair and transparent website that doesn’t conceal material information in the fine print.
Moreover, there are no prepayment penalties and you can check the costs of your loan online and your credit score will remain unperturbed.
The origination fee is also very competitive and it may range from .50% to 4.95%. If you are taking a bolt to consolidate your debt or pay off credit card debt etc, Prosper may not be the best option for you as loans take a few weeks to fund.
Upstart loans can be used for various purposes like debt consolidation, medical bills or maybe to fund a major life event like opening up a business or relocating to a new city.
Upstart loans are designed in a way that it helps younger applicants to raise funds who have a very thin or no credit history at all.
Upstart takes into consideration the earning potential of the applicant by weighing college degrees of the applicant, field of study and work history etc.
Upstart requires a minimum credit score of 620 for applicants who have got a credit score with no bankruptcies and less than six inquiries on credit score over the past 6 months.
The inquiries on student loan and car loan are excused. Upstart’s average three-year loan has an annual percentage rate of 20%, according to the company.
3. Lending Club
Lending Club is a peer to peer lending network wherein individual investors can service loans of the applicants. Lending Club is lenient in sanctioning installment loans for bad credit when compared to the big banks, thanks to its peer to peer model.
One of the greatest perks of peer to peer network is that it increases the risk tolerance on the part of the company. Also, it gives a leading edge over other financial institutions as they are not bound by hard-line compliances.
The upper limit of advances that you can borrow from Lending Club is $40,000 and APRs range from 6.95% to 35.89%. Not to mention, the best APRs are available for applicants with the highest credit score (700 or higher).
Lending Club charges no upfront fee; no brokerage fees, no application fee or no repayment fees. They, however, charge an origination fee which could be as much as 5% of your loan amount.
Many people resort to Lending Club when they are confronted with a big, unforeseen expense. However, Lending Club has got a reputation for coming to the rescue of the people who want to consolidate their debt.
Lending club processes your loan in a matter of minutes and deposits directly into your bank account within a few days.
The installment loan from Marcus by Goldman Sachs is perhaps one of the best loan in the country to consolidate one’s debt.
Marcus is a consumer banking winging run by Goldman. It offers loans to people with a credit score as low as 580. This makes Marcus a standout amongst the providers of best installments loans for bad credit.
The online application takes a few minutes to complete and you can get your loan cost instantly, which may range from 6.99% to 24.99%.
The APR may vary depending upon your credit score and market fluctuations. Marcus makes things simple; the only thing you pay is the interest rate, no fees, no processing charges, and no repayment fees.
If you are looking for a loan to cater to our needs, Marcus is a good hassle-free option to save the day.
Every now and then, you are strapped for funds and all you need is a fresh influx of money to get you through the mess.
It might be a dent on the bonnet of your car, a broken furnace or anything. Installment loans don’t allow the horses of interests to take the bolt while the stable’s door is open.
Therefore, Installment loans are always a good substitute to credit cards where debt keeps accruing beyond a time frame.
With Avant, you can borrow up to $35000 and choose any repayment plan from 24 to 60 months term. APRs range from 9.95% to 36%.
It may not be enticing for most people, but when contrasted with 400% APR of a payday loan, Avant’s installment loan seems like a good bargain.
The best part is that loans from Avant are unsecured and you don’t have to keep your car or house as collateral.
One Main financial might be a good option if your credit score is chaining you. This veteran lender gives unsecured loans, but may also offer secured loans because which needs to be backed up by collateral.
With more than 1800 branches across the length and breadth of America, One Main is a convenient and accessible option for most people. You can also apply online.
One Main is widely popular since they work with applicants who have an average credit score and is accredited with an A+ rating.
The fact that One Main has strong physical presence makes it possible to give a personalized touch to its clients; an edge over its competitors.
One Main personal loans are available in amounts between $1500 to $30000 with APRs ranging from 15% to 36%. You can choose a loan term from 2 to 5 yrs along with a monthly payment that best fits your budget and income.
How Do Installment Loans Work?
An installment loan isn’t rocket science. It’s a loan amount that you borrow and pay it back over a period of time. The installments you pay doesn’t fluctuate and are made up of both principal money and interest. Installment loans are often called personal loans and they can be used for any purpose.
Installments loans could be both secure and insecure. Secure installments loans require you to keep a valuable possession of yours as collateral.
The bank could sell and realize the assets should you fail to pay the loan amount via installments (default by will or circumstance).
This makes secured loan less risky compared to the unsecured loans from the bank’s perspective. This could transversely mean that secured loans are riskier for you.
They may allow you to obtain a loan at a lesser APR compared to what you would have got otherwise (in case of an unsecured loan). But, it also means that you could pretty much lose your valuable asset in case you default payments.
On the contrary, an unsecured loan requires no collateral. The risk factor is quadrupled on the part of the part of the lender as he/she has no assurance against your credit.
However, rates will be considerably higher when contrasted with secured loans. Even though you won’t lose an asset upon defaulting, it will have severe repercussions on your credit score and ramifications will follow.
Aren’t Installment Loans for People With Bad Credit?
The hive mind of the Americans is of the opinion that Installments loans are for people with bad credit. The reality, however, is light years away from this notion.
This notion primarily exists because subprime lenders have falsely professed that installment as a better alternative to payday lending.
Over the years, borrowers with bad credit have realized that APRs on installment loan often climbs to triple digits. Some of the popular unscrupulous tactics include forcing credit insurance down the borrower’s throat or pressing for loan renewal every now and then.
One should search for a personal loan and not installment loans. The terminology hasn’t yet been cracked by subprime lenders and you would see drastic changes in the results on mere change of keyword search.