Installment loans for bad credit
Nowadays, people are having a hard time sustaining a stable financial state, especially for a longer period of time. Even regular monthly financial obligations like the electricity bill or just basic living costs like food can often throw people off the wagon. The reality is that if you do not have enough money to afford your normal living expenses, you need to find a way to make extra income. However, people simply do not have that time to react as fast as possible to the financial issues that they are facing. Financial problems like unexpected emergency expenses can often leave even the most well-prepared without an alternative but to find some money assistance.
When there is an issue at hand, you need to deal with it
Whether you are facing an emergency expense or are having trouble with paying your regular bills, you need to find a solution to that problem. The quicker you do it, the better it is going to be. In such a variety of loan options, it can often be quite overwhelming for people to find the actual type of financial assistance that is best suited to meet their specific needs. We also need to mention that the reality today is that many people do not have perfect credit scores. So most of them simply cannot qualify for most of the standard loans offered by traditional loan lending institutions such as banks. Luckily nowadays, there are many loan lenders who offer services even to people with poor credit scores. One of the most popular types of personal loans that are also widely available to people with bad credit scores is called installment loans.
What is an installment loan?
Installment loans are one of the most popular types of loan that people normally go to when they are having financial difficulty. With this loan type, you repay the amount of money that you have taken out plus the interest rate and fees in scheduled payments over a pre-determined time period. The length of the repayment period of these personal loans is usually between six months and three years. The longer the loan period is, the smaller your monthly payment is going to be. However, even though you will be paying less each month, you will be repaying what you have borrowed for a longer period of time. Which means that you will end up paying more money in the long run. There are many different loan types that are considered as installment loans. The interest rates on these loan types can be quite high, especially if the loan that you are taking out is unsecured. Secured installment loans usually have lower interest rates, but they have other cons that you should definitely take into an account if you are considering such options.
Different types of installment loans
The first thing that we need to acknowledge is that even though credit cards work in a similar way as installment loans, they are not considered as such type of loans. Mainly we should look at the different types of personal scheduled loans in two main categories – unsecured and secured scheduled loans.
Unsecured Installment Loans
This type of scheduled loans are normally for a smaller amount of money and have higher interest rates. However, that does not mean that they are not a popular loan option among the majority of borrowers, in fact, it is quite the opposite as unsecured scheduled loans are one of the most common loan types today. Generally, what makes this loan option so attractive to borrowers is the fact that the service is fast and easy to apply for, and most importantly, it is highly accessible.
Bad credit unsecured installment loans
One of the biggest problem for most people when it comes to borrowing money is their credit score. Conventional loan lending institutions rarely grant any types of loans to people with poor credit scores. Today, however, there are numerous private loan lenders that offer poor credit scheduled loans to those who need them. Of course, such loans have higher interest rates and fees, but that is quite normal given the risks that private loan lenders are taking when granting these loans. The most important thing that private loan lenders are going to look at is your income. If you have a stable source of monthly income, you will probably have no problem qualifying for a poor credit installment loan.
Secured scheduled payments loans
Unlike unsecured installment money borrowing where you do not need to back your loan with anything, with secured installment loans, to get your loan you normally need to use some of your property as a guarantee (collateral) for securing the loan. Here are some of the most common secured scheduled payments loans:
By taking out a mortgage loan, you are able to finance your home and repay the money over a set number of years. While this type of loan normally offers a significantly lower interest rate compared to most unsecured types of loans, if you fail to make your payments, you would be putting your home at risk. So unless you are absolutely confident in your ability to make your payments on time, you may want to avoid this loan option.
It is pretty common for people to take out car loans when they need a car but do not actually have one. Taking out a car installment loan allows you to buy a car and pay for it over a longer period of time with scheduled monthly payments. Similar to mortgage loans, if you fail with the repayment of your loan, you will probably lose your car.
Another type of installment loans is student loans. Student loans are becoming one of the biggest financial problems in the United States, as the overall student loan debt amount is constantly rising. In the past, student loans were considered as a good debt and a sort of self-investment. Nowadays, they are often a debt that people carry for a very long time. A person takes out a student loan when that person wants to fund his college education. The reasons behind such decision are quite obvious – a better education often means better opportunities for career paths. However, in many cases, the expectation of a future career does not exactly meet the reality. Often, people do not get the income they expected.
If you are having financial difficulty and need help to sustain some financial stability but you do not have a good credit score, taking out a bad credit installment loan may just be the solution to your problems. Make sure that you are ready for the interest rate that you are going to have to pay on such loan. If you are not ready for your repayment process, you may end up in a situation worse than the situation you were in before even taking out the loan in the first place.