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How do installment loans work?

Is this short-term option right for you?

If you’re in the market for a loan you’ll come across a range of options. However, when you have bad credit, that list of loan choices starts to become shorter.

If you need financing and your credit isn’t perfect, you still have a few loan options available to you – one is an installment loan. Find out how do installment work in this our guide.

What exactly is an installment loan?

Any loan that is paid in ongoing fixed regular installments can be considered an installment loan. While these loans are often associated with bad credit, they can technically be any kind of personal loan that is repaid in installments.

How do repayments work on an installment loan?

Repayment terms differ depending on what type of loan you apply for and the lender you apply with. Generally, the following will apply:

Repayment termsDescription
Loan terms.These vary between 6 and 60 months (5 years).
Payment method.Lenders will usually deduct payments from your bank account on the day the payments are due. Some lenders will also give you the options of repaying the loan online, via a check or through an app.
Repayment frequency.You will usually repay the loan according to your pay dates.

How much will it cost you to borrow?

This will depend on the loan. When you apply for a loan and are approved, you should receive a loan contract that will outline the fees and interest rate that will apply to your loan. Here are the costs that may apply:

  • Fees. You may be charged a loan origination fee, prepayment penalties and late payment fees.
  • Interest. This is the rate of interest you are charged for borrowing, expressed as a percentage.
  • Annual percentage rate (APR). This includes all fees and interest expressed as a yearly percentage.

Need to borrow money fast? You can get a short term loan online with serious speed

Am I eligible for an installment loan?

Installment loans can be applied for if you have bad credit or are on a lower income as long as you are able to afford the repayments. Generally, lenders will look at your income, credit history, employment and checking account information to determine your eligibility for a loan. Keep in mind that installment loans are not legal in all states so your residency will also have a bearing on your application for an online installment loan.

The short term loan laws in your state

Installment loans you can apply for

Check the websites of any providers you’re interested in to confirm they operate in your state of residence.

Name Product Filter Values Loan amount Turnaround time Requirements
OppLoans Installment Loans
$500 to $5,000
1 business day
Direct deposit, meet minimum income requirements, live in eligible state
Comes with the option to change your due date so you won’t fall behind on repayments.
Fast5kLoans Short-term Loans Connection Service
$100 to $35,000
As soon as the next business day
Regular source of income, verifiable bank account, US citizen, ages 18+
Get connected with multiple lenders you might qualify with — even if you have bad credit.
LendYou Short-term Loans
$100 to $2,500
Same business day to 1 business day
$1,000+ monthly income, direct deposit, US citizen or permanent resident, ages 18+
Get offers from potential lenders in minutes by filling out just one online form.
Monevo Installment Loans
$500 to $100,000
Varies by lender
Credit score of 500+, legal US resident, ages 18+
Quickly compare multiple online lenders with competitive rates depending on your credit.
Fig Loans Installment Loans
$200 to $800, varies by state
As soon as the same business day
3 months of direct deposits, $1400 per month income, positive bank account balance
Get an affordable installment loan that comes with no fees, flexible terms and predictable monthly repayments.

Compare up to 4 providers

Here’s how you can apply for an installment loan

Applying for an installment loan is simple. Compare your options and find a loan you’re eligible for and that is right for you, then click “Go to Site” button to start your application.

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4 Responses

    Default Gravatar
    Rym4UK9May 28, 2018

    Can you tell me where I can find legit installment lenders who offer fast same day cash. Need it today!

      Default Gravatar
      joelmarceloMay 29, 2018

      Hi there,

      Thanks for leaving a question on finder.

      We have a comparison of legit installment lenders in the table above. Please note that you will need to choose your state from the dropdown to get a direct comparison of lenders who can help you. Once you have decided on the suited loan for your needs, you may click on the green ‘Go to site’ button to submit your application or know more about the loan offer.


    Default Gravatar
    WilliamMarch 8, 2017

    Can I put a installment loan on a prepaid card

      Avatarfinder Customer Care
      HaroldJuly 18, 2017Staff

      Hi William,

      Thank you for your inquiry.

      The process may differ depending on the lender. But in general the lenders will direct deposit into your checking account.

      I hope this information has helped.


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