All About Installment Loans: How they Work

Americans who need cash fast have so many different financial options to choose from. Personal loans, payday cash advances and loans from friends and family are all viable options to help solve short term problems.

Online installment loans can also help consumers who are in need of cash fast.
What are Installment Loans?

Installment loans are loans that can be paid back with installment payments. Depending on who issues the loan, repayment terms can be anywhere from a matter of months to several years. Unlike personal loans, installment loans are also much easier to qualify for yet offer a lower approval amount for the consumer.

How to Qualify for an Installment Loan

Online installment loans require a minimal amount of paperwork and offer less stringent guidelines for the potential borrower.

Some of the items required include:
An online application for the loan.
Copies of recent pay stubs for income verification.
Proof of address, like a utility or phone bill.
A government-issued identification card, like a driver’s license.

Some additional documents may be required depending on the person that submitted the application.

Once all the documents are received, a decision is usually rendered within minutes. The applicant must be 18 years of age and a citizen of the United States, should have sufficient income to cover the repayment of the loan, and should not currently be in bankruptcy proceedings.

Once the loan is approved, funding usually occurs within a couple of business days. The lender will request additional documentation from the borrower if any is needed prior to the funding date.

How are Installment Loans Different from other Loans?

An installment loan is a great alternative to other types of loans because of the way they are structured.

A personal loan is usually much harder to qualify for and repayment terms are strict. Payday loans offer much less in terms of actual funding and must be repaid once a borrower has received their next paycheck. An installment loan not only offers a larger funding amount, but comes with easy repayment terms up to 6 months. Borrowers can also repay the loan early without an early repayment penalty.

While borrowing from friends and family can be a viable option, many consumers do not wish to reveal their financial hardships. An affordable installment loan takes away the need to go searching for money in a fashion that would place undue stress on most consumers.