Do you need a quick cash boost? Here’s how a five-month installment loan can help out.
Family emergencies, unexpected vet bills, or wanting to take a long overdue vacation are all reasons that may prompt someone to consider a short term or payday loan. However, repayment for short term loans are due back fast – usually by your next paycheck. If you need fast cash, quick approval and up to 5 months to repay, an installment loan might help you out.
What do you need to look for when comparing 5 month installment loans?
- Legal in your state.
Not all installment loan lenders are authorized to lend in every state.
- Fees and rates.
Fees and rates will vary from lender to lender. You’ll want to check what the APR of the loan will be, if there are origination fees, what the lender will charge if a payment is late, or if they will charge a fee for paying the loan off early. Some lenders will also charge a fee if you pay by check as opposed to a direct withdrawal from your bank account.
- Approval period.
Turnaround time will vary, so the faster the approval process the better. Unlike bank loan applications that are in-depth and often time consuming, a short term or installment loans have almost instant approval and the cash transferred to your account within a couple of days, if not sooner.
- Loan terms
Decide what will work best for your budget (weekly, biweekly or monthly repayments) and see which lenders offer those loan repayment terms.
Are payday loans available in my state?
Compare payday loans in your state
Check the websites of any providers you’re interested in to confirm they operate in your state of residence.
Benefits and drawbacks
- Bad credit accepted.
There are installment loan lenders that cater to borrowers with bad credit, as long as they can show their ability to repay the loan.
- Flexible loan amount.
A five-month installment loan gives you access to the amount you need, regardless of what you need it for. Different lenders offer different loan amounts, but you can generally borrow anywhere from $300 to $10,000.
- Fast approval.
Providers of online installment loans tend to process your application very quickly, informing you of their decision in a matter of minutes. If you accept the loan contract, you can get your money the following business day.
- Higher fees and rates.
Short term and installment loans are usually meant for short-term financing, which makes them more expensive than standard loans. How much you will pay depends on how good your credit score is, whether the loan is secured or unsecured, what lender you applied with, among other factors. If you opt for a variable rate loan, and pay out early, you may be charged an early payout fee.
Things to be cautious of
It can be very tempting to borrow more than you need, especially if the lender says you qualify for a higher amount. Always remember that you will have to pay interest and other additional costs on your loan, so you should only borrow the amount you need and have a clear purpose for what you want to spend it on.
- Missing payments.
Make sure that you can comfortably make your monthly repayments before you apply for a loan, as the penalties for late payments can quickly add up.
- Extending the length of the loan term
In general, you want to borrow for the shortest term possible. Spreading the loan out over a longer period of time, like 9 or 12 months, may decrease your monthly payments but you’ll pay more for the loan overall due to interest.
Remember, it’s always important to compare your options when it comes to loans for any term length. Use the table above to help with your comparisons.
What type of loan are you looking for?
Frequently asked questions
Can anyone apply for an installment loan?
Remember that not all lenders provide installment loans in all states. In states where they do:
- You have to be at least 18 years old in most states
- You must be a United States citizen or permanent resident
- You must provide proof of income
- You may need an operational bank account if applying online
What information do I have to provide to apply?
You’ll have to provide personal details, employment details, and your bank account details.
The answer to this question lies in how you’ve been making payments, your total credit limit and a whole range of other factors found here.
How much time do I need to complete an online application?
If you have all the required information easily accessible, completing your application should take around 5 to 10 minutes. Much the same as a short term loan.