There comes a time in your life when you need to borrow money due to financial constraints. It could be for a car repair, college tuition, rent, or even a medical emergency. Many lenders offer loans; you have good reason to be wary and careful when considering them.
Choose the wrong lender, and you could be trapped in an endless cycle of debt consolidation. Hence, before applying for one, you must learn about different loan types.
Most of the loans you find online are installment loans. They are your best choice because they are relatively easy to repay.
What are Installment Loans?
Installment loans, also called installment credit, are pretty simple. You borrow money from a lender and return it via affordable monthly payments. Moreover, these loan installments are based on your borrowed money, interest rate, and loan term.
Most of the first few installments go toward your interest. Later on, the money starts going toward your principal. Of course, you’ll have to pay a few fees when applying for a loan. These can be loan origination fees or something else.
Types of Installment Loans Online
Now that you know what an installment loan is, let’s get into the different types. Auto, mortgage, and student loans are types of installment loans. You can probably tell what these loans are for by their names.
Except for student loans, the other installment loans are secured loans. That means you take the loans out against something. If you fail to repay the loan, the lender will sell whatever collateral you have and recover the money.
On the other hand, student and personal loans are unsecured installment loans. That means the lender will not ask for collateral. However, the lenders give you the money based on your ability to repay it and the history of your credit report. Interest rates are usually higher for these loans.
What Is a Personal Installment Loan?
Personal installment loans are fixed loans you can take out for any purpose. Like any installment loan, you agree with the lender to give the money back over a set period. The lender decides the interest rate based on your previous history, but the average is 9.41%.
Who Should Avoid Taking Personal Installment Loans For Bad Credit?
Installment loans are generally for higher sums of money. So if you only need a few hundred dollars, it makes no sense to opt for a long-term loan. In such cases, payday loans should suffice.
You can find a lender, and they will lend you the money that day. Afterward, you write a pre-dated check for your payday or give them access to your bank account. That way, they can automatically get what they are owed from your account.
Of course, you will have to find a reliable lender first. If you’re in Mississippi, you’re in luck. Loan ServiceMS offers payday loans with reasonable APR rates and flexible terms. Plus, the process is fast and completely online. You can use this online lender to get up to $5000 in payday loans.
Benefits of Online Installment Loans
Installment loans are one of the best loan options available to you. They are convenient, and you can use them to finance some big purchases. The interest rates are low, and you have more flexibility with the terms. More benefits include:
- Fast Process
The loan procurement process doesn’t take long if all your documents are in order. The lender will run a credit score check, and the approval heavily depends on a good score. The approval time varies according to the loan you’re getting and the institution you’re getting it from.
Some lenders will approve the loan within 24 hours. Others may take longer to run a thorough check and verify everything. In addition, you can opt for online installment loans to smooth out the process. Before applying, check for any documents you need to secure an installment loan in Mississippi.
- Allows Budget For Repayment
Unlike payday loans, where you have to repay the entire amount in one lump sum payment, installment loans give you more flexibility.
Since the amount is fixed, you can budget for it beforehand to avoid difficulties. Plus, you have the luxury of choosing the loan term.
We do not recommend missing out on any payment, as it will impact your credit score. A low credit score makes it harder to secure any loans in the future.
Thus, you will have a harder time financing a car or getting a mortgage. Additionally, the interest rates are higher for folks with lower credit scores.
- Lower Interest
Since these are long-term loans, you have a lower interest rate. The average APR for installment loans is 2.5% to 36%. On the other hand, payday and other short-term loans have an average APR ranging from 391% to 521%. The difference is evident.
If you are looking for installment loans in Mississippi, the average interest rates are 6.85% and 5.92% for a 15 and 30-year payment, respectively.
Payday loans have higher interest rates because the lenders will take the money from you in one go. Thus, they need to charge as much interest as they can.
Lenders offering installment loans work towards giving out more significant amounts over more extended periods. So they don’t need to charge as much interest.
Conclusion: No Credit Check Installment Loans
That winds up our explanation of installment loans and their benefits in Mississippi. If you’re going to get a car, house, or even go to school, you’ll inevitably have to take out an installment loan online.
When the time comes, you’ll need to find a reliable lender and thoroughly read the contract for the details. Pay special attention to see if there are any hidden fees.
You’ll need to consider the money you need, the interest you’ll be asked to pay, and the term they’ll offer you. You can go for multiple loans to see where you get the best interest rate. You can get the best installment loans online but always practice caution.
When you manage to secure a personal loan, ensure you are only borrowing the amount you need. No need to borrow any extra amount and pay interest on it later. Following all these conditions, you should have no trouble getting your money.