When you borrow a fixed amount of money and must repay it in regularly scheduled payments, that is known as an installment loan. Car loans, personal loans, and mortgages are just a few examples of popular installment loans. These loans involve monthly installments calculated so that the borrower repays the loan to an agreed schedule. 

Installment loans are common, and, in most cases, you don’t need to have good credit to enhance your chance of being approved. But this is where most people fall prey to unscrupulous lenders who charge borrowers with poor credit high-interest rates.

When looking for a loan, it is advised to always read and understand fully the terms before you sign the agreement – and know about your credit rating. 

Today we will keep the focus on installment loans for bad credit

What is an Installment Loan for Bad Credit? 

Borrowers with no credit, imperfect credit history, or bad credit scores, are the prime candidates for installment loans for bad credit. It is a type of payday loan designed to help people struggling to get access to credit.

Online lenders offer installment loans although some credit unions and local banks may also provide payday loans for poor credit. 

Payday loans for bad credit borrowers are usually secured, therefore borrowers must provide an asset to serve as collateral to get approved for the loan. This way, the lender reduces the risk associated with defaults since they can just repossess the asset to offset the loan balance. 

But some lenders may not need collateral in order to approve an installment loan for credit-challenged borrowers. This is called an unsecured loan, but instead of collateral, lenders tend to charge higher interest rates to protect themselves against defaulters. 

Features of Installment Loans for Bad Credit 

As we now see, you don’t need to have a great credit score to qualify for an installment loan. You can take out a certain loan amount and repay it through fixed repayments over a period of time. 

Installment loans for bad credit have unique features that distinguish them from other types of loans: 

  • Variable or fixed interest rates often apply. Variable interest rates change during the loan period. Fixed rates on the other hand, mean the interest rates stay the same throughout the loan tenure. 

Although terms and interest rates vary depending on the lender you choose, installment loans typically have: 

  • Higher fees: Installment loans for bad credit tend to have higher fees. The fee may be an administrative fee, loan servicing fee, or collection fee. 
  • Higher interest rates: It is common for lenders to charge higher interest rates on loans for borrowers with bad credit. 
  • Loan amounts: Bad credit installment loan finance companies typically offer loans ranging from $100 – $10,000.

How to Choose an Installment Loan

Here is what to look out for when choosing payday loans: 

  • Fees: Most lenders charge an origination fee on loans, which can range from 1% to 10% of the total loan amount. Always ask the lender to disclose all the fees associated with the loan before agreeing on the loan offer. 
  • Annual percentage rates: The APR is a term used to understand the cost of borrowing. For a personal loan, the APR is the annual cost of taking out a loan expressed as a percentage. Generally, you should find the lowest APR possible. 
  • Monthly payments: Payday loans tend to have fixed interest rates, which means that your monthly installments remain the same throughout the loan term. This can be great for your budget as it allows you to manage your debt properly. 
  • Minimum credit score: Different lenders have different definitions of bad credit. Some consider it to be below 630 while others may have no minimum requirements and may approve borrowers even with no credit histories. 
  • Credit-repair features: Most online lenders work with the three biggest credit bureaus namely Experian, Equifax, and TransUnion. They report your loan repayments to these credit bureaus, thus if you regularly make on-time payments, you can improve your credit score. Some lenders also have additional features to help borrowers build credit. Always choose a lender that helps you repair your credit score. 

How Installment Loans for Bad Credit Work

You do everything online – from the simple application to the deposit of funds in your account. Most online platforms are brokers, who then match you with a lender. 

One of the leading installment loan brokers is MyUSALoans, which provides unrivaled access to bad credit loan lenders. On submission of your application via their easy-to-use website, you will get an instant decision on your loan request. Your funds will typically be deposited within 1 business day.

Eligibility Requirements

For you to apply for bad credit installment loans via MyUSALoans, you will need to: 

  • Be 18 years or older
  • Show proof of steady income 
  • Have an active bank account with direct deposit. 

Benefits Of Installment Loans 

Fast application 

Most lenders operate online, and you can fill out the application on any device with internet access. It takes only a few minutes to complete if you have the required information readily available. 

Affordable loans 

Your income will determine how much loan you can borrow. However, most lenders have predetermined algorithms that limit the amount of money you can borrow to protect you from falling into a debt cycle. 

Easy qualification 

Most payday loans don’t involve credit checks and if you can prove that you earn a steady income, you can easily qualify for a no-credit check loan. If you have not defaulted with another lender, your chances of being qualified are still good. 

Flexible payment 

Installment loans for bad credit tend to have flexible payment plans to meet your unique financial needs. In some states, the loan can have a payoff period of three months. But you can often also repay the loan early without a prepayment penalty. 

No spending restrictions 

You can use your loans for anything. But we suggest that you only borrow when you are in a financial emergency. Unlike bank loans, installment loans and other payday loans don’t have restrictions on how you spend them. 

Will My Credit Report Be Affected? 

MyUSALoans doesn’t check your credit score when you apply for an online loan. But some lenders may check your score via a ‘soft search’ which will not show up as a request for credit on your report. 

Can I Get a Bad Credit Loan with Guaranteed Approval?

While it’s normally easy to get approved for a payday loan, unfortunately, no one is guaranteed approval. No matter how few the loan requirements are and how good your credit score is. However, if you have a steady stream of income and an active bank account that allows for direct deposit, you will have an excellent chance of getting approved via MyUSALoans.com.

Can I borrow twice from the same lender? 

Pretty much. Especially if you have successfully repaid a loan on time in the past. So repaying your loan on time will always increase the chance of borrowing twice from the same lender. 

What other options do I have? 

If you feel like an installment loan for bad credit is not the right solution, there might an alternative for you, including:

Guarantor loans 

As the same suggests, these are types of unsecured loans that require a cosigner in the form of a family member or a friend. The guarantor simply promises to repay the debt if the borrower default. 

Guarantor loans are ideal for anyone with poor or no credit score and if you can repay on time, you can use them to repair your credit score. 

Secured loans 

Secured loans are also a great way to access credit if you have poor credit. With a secured loan, you need to designate collateral that the lender will use to recover the cost if you default on the loan. 

Why Choose MyUSALoans for Bad Credit Loans in Maryland?

If you want a payday loan for bad credit, you can use MyUSALoans to borrow up to $5,000. They can match you with a reputable lender who will be able to provide you with the funds you need.

With MyUSALoans, you can get a loan in three simple steps: 

  • Loan request: The platform is safe and secure 
  • Decision: Instant decision on your loan request 
  • Get your funds: Receive up to $5,000 in 24 hours. 

Conclusion 

If you need a loan but you are afraid of your bad credit score, MyUSALoans can help you get a loan within 24 hours. The platform will match you with the best lenders in America and within the same day of application, you will receive your funds so that you can sort out your financial emergency. 


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