Need quick access to over $1,000? Installment loans give you just that with longer repayment terms.
Sometimes referred to as the more respectable cousin of payday loans, installment loans are designed to cover one-time expenses that need a quick fix. You can typically get money fast if you apply for one online, but have a longer time to pay it off than a payday loan.
Check out our guide below to learn more about how online installment loans work.
A selection of online installment loans
Here are some providers that offer online installment loans. Keep in mind that that the maximum loan amount is based on the lender’s maximum amount nationwide. The amount will vary based on your state of residence.
A selection of lender-connection services
These lender connecting services are not lenders, loan brokers or agents for any lender or loan broker. They also do not make credit decisions. They focus on trying to connect you with a lender that might be able to provide you with the funds you’re looking for. Keep in mind that the maximum loan amount is based on the matching services maximum amount, but it varies based on your state of residence. If you decide to go with one of these services, confirm that the lender is reputable by checking with your local government.
What’s an installment loan?
Though technically any term loan counts as an installment loan, the most common type of financing that goes by the name are a type of short-term loan. It gets its name from the way you pay it off — in installments over a period of time.
Installment loans work by giving you all of your funds at once, which you then have to pay back plus interest in fixed amounts. Repayments are usually due on your payday and last between six months and five years.
Installment loans are typically available in larger amounts than their short-term cousin payday loans — sometimes up to $5,000. They also have longer terms and are not as heavily regulated.
Like payday loans, some installment loans are designed to attract borrowers with bad credit. Watch out for these: They can come with incredibly high interest rates.
What can I use an onlin installment loan for?
You can generally use an online installment loan for any legitimate purpose. However, it might be best to save them for emergencies, since they can come wth higher interest rates than other types of personal financing. You can use installment loans for:
- Medical expenses. Sometimes healthcare providers don’t provide financing that all patients can qualify for. An installment loan can help make paying off medical bills more manageable, although more expensive.
- Building or car repairs. Got a car that needs urgent repairs? Installment loans can help you cover that cost, no mater what your credit type is.
- Overdue utility bills. An installment loan can help you keep the lights on, water running and phone line working when you don’t have the funds to make your utility payments on time.
- Building your credit. Taking out an installment loan can sometimes help you rebuild your credit if you make payments on time. If this is your primary goal, however, you might want to consider applying for a credit building loan at a local financial institution like a bank or credit union. These which typically comes with lower interest rates and have low credit requirements.
What are the benefits of getting an installment loan?
Online installment loans come with various features. Here’s what you should know if you’re considering applying for one:
- Convenient application process. You can apply conveniently online and some lenders even have smartphone apps.
- Quick funding. You can learn your application status in minutes with most lenders, and if approved, you can accept the loan contract. Once you do this you can expect the money in your bank account as early as the next business day.
- Flexible eligibility criteria. Getting online installment loans with bad credit is possible, primarily because lending norms are slightly more relaxed. “No credit check” online installment loans generally don’t make hard inquiries on your credit score, but you’ll need to demonstrate how you’ll be able to repay the loan.
- Variable fees. The state you live in along with the amount of money you borrow has an effect on how much you pay in fees. Not all lenders charge the same fees, so keep this in mind when comparing your options.
- Loan amount and terms. Both these aspects depend on state laws. In some states you can borrow up to $10,000 and the repayment period can extend up to five years.
Watch out for predatory lenders
Installment loans are not just for people with bad credit, although you wouldn’t know that if you only did a quick Google search. That’s because some subprime lenders repackage what they would have previously called a payday loan as an “installment loan” in an attempt to appear less risky.
Like payday loans, these installment loans tend to come with extremely high interest rates and have similar features that can act as debt traps. But you can usually avoid them if you know what to look out for:
- Loan renewal options. Does your lender allow you to renew or “rollover” your loan if you can’t pay it off in time? You might want to look somewhere else — this is where you can fall into a cycle of debt.
- Guaranteed approval. Lenders that guarantee you can get a loan through them before you apply are not looking after your best interest. Most reputable lenders want to make sure you can pay off your loan first before telling you you’re accepted.
- Upfront fees or payments. Reputable lenders that charge application or origination fees don’t ask for payment until after your loan is disbursed. Anything else could be a scam.
- Pressure to borrow more than you need. Taking out more than you need means you’ll be on the hook for more interest. A lender that pressures you to take out more doesn’t have your interests in mind.
- Insurance add-ons. Some lenders push insurance options that sound like they protect you, but really protect them in the event that something happens to you that affects your loan repayment (like death). Lenders typically don’t include this in their APR — even though it’s technically a fee — and use it as a way to get around state regulations on how much they can charge.
- The lender approached you. Getting a lot of texts from or robo calls from a lender? It could be a scam. At most, legitimate lenders might send you a letter or two in the mail. Run away if you feel like they’re pressuring you into taking out a loan you don’t really need.
What if I'm the victim of a predatory lender?Under federal law it’s illegal for lenders and collection agencies to repeatedly contact borrowers outside of work hours, threaten them with jail time or garnish their wages without a court order. If you believe you might be a victim of a predatory lender — even a tribal lender — you can file a complaint with the Consumer Financial Protection Bureau.
Just some of the top installment loan providers we compare
Who qualifies for installment loans?
People who qualify for installment loans typically have:
- Verifiable income. This doesn’t mean you need to be employed. Some lenders accept alimony and pension as income.
- An active checking account. If you don’t have a checking account, you can sometimes get a cash installment loan from a brick-and-mortar storefront.
- Government-issued identification. Lenders might ask to see your driver’s license to verify that you meet the age requirements.
Applicants with good to excellent credit scores are more likely to get a good deal on online installment loans. That’s because many lenders use underwriting software that rely heavily on your credit history when determining your eligibility.
4 tips for finding the right installment loan
- Figure out what you care about most. Is speed most important to you? You might want to look at online lenders. Do you care more about overall cost? You might want to check your local bank or credit union. Know what you need out of a loan can help you speed up your search by giving you something to go by.
- Ask yourself: Does a credit card make more sense? Credit cards typically have higher interest rates than personal loans, but that’s not always the case with online installment loans. There’s a chance you could get funding at less cost (or risk) by slapping that expense on plastic, if it isn’t over your credit limit.
- Search for personal loans too. As we mentioned before, lenders that use the term “installment loan” can be predatory. You might have better luck finding a legit lender if you also look for personal loans.
- Compare lenders. You might not be getting the best deal if you don’t look at multiple lenders. You can start by using our comparison table.
What to look for when comparing loans
- Loan amounts. Will you be able to take out exactly how much you need? Try to avoid unnecessarily larger loans — that can lead to extra debt.
- Interest rates. Be skeptical of lenders that won’t give you an interest rate upfront. Try to get an estimate of your APR — your combined interest and fees — as early as you can.
- Fees. Will you have to pay a fee to apply? To get your loan? What are the conditions for late payments?
- Loan terms. Your loan term will determine how long you have to repay it. It’ll also determine how much you pay in interest — a longer-term loan might seem more manageable but it could end up being hugely expensive. Try going with the shortest loan term you can afford.
- Speed. Will you be able to get your funds by the time you need them? Fast loans can sometimes be more expensive, but low interest and fees aren’t much help if you need cash right away.
Here’s how some top online lenders compare:
|Provider||What sets it apart||Loan amounts||Trustpilot rating|
|MoneyKey||Easy-to-use online application and payment system.||$200–$1,000 (unless otherwise stated)||9.0/10 based on 1,326 reviews|
|Blue Trust Loans||Income-based payment schedule.||$100–$2,000||7.1/10 based on one review|
|Slam Dunk||You can qualify even if you have poor credit.||$100–$2,500||No rating|
|NetCredit||Reports payment activity to credit agencies to help build credit.||$1,000–$10,000||8.4/10 based on 481 reviews|
|CashNetUSA||Save 15% using a CashNetUSA promo code.||Varies by state||8.9/10 based on 2,527 reviews|
|OppLoans||Long loan terms — meaning more affordable payments.||$1,000–$4,000||No rating|
Is an online installment loan right for me?
You may want to consider an installment loan for the following reasons:
- Fast turnaround time. Providers of online installment loans tend to process your application very quickly, sometimes in minutes. If you accept the loan contract, you can get your money as soon as the following business day.
- Bad credit applicants are accepted. Conventional loans normally come with stringent lending criteria, but most employed people can consider applying for online installment loans with bad credit, as long as they can show their ability to repay the loan.
- More manageable repayments structure. Unlike short-term loans or cash advance loans that you have to repay by your next payday, you can take longer to repay your installment loan. Most lenders even give you the ability to choose between making payments once or twice a month.
You may want to consider other options if you’re concerned about:
- Fees. Online installment loans normally charge higher fees especially in comparison with more conventional forms of credit.
- Higher repayments due to higher loan amounts. Installment loans have higher loan amounts than standard payday loans. While you have lower ongoing repayments because you’re paying it back over time, repayments can still be expensive. Make sure it’s manageable on your budget before you sign up.
- Total loan cost. The APR on online installment loans can still be quite high, resulting in a high total overall repayment.
What are my other options?
Most online installment loans are unsecured, meaning that they don’t require collateral. It sounds great at first, right? You don’t have to put anything on the line.
However, unsecured installment loans that come with high rates and can actually pose more of a risk to your financial health: You can end up in a cycle of debt if you have trouble paying it off.
Secured loans can be a great option if you have trouble getting approved for traditional loans. That’s because putting up collateral makes you appear like less of a risk. And even if you don’t have trouble getting approved, you can often get better rates with a secured loan.
More about secured and unsecured personal loans
You might also want consider looking at what your local bank or credit union has to offer. Local financial institutions tend to have their community’s specific financial needs in mind, so there’s a pretty good chance you’ll find a loan that’s right for you.
Paying off an installment loan
How you repay your installment loan largely depends on your lender. Generally, you need to make monthly, semi-monthly or weekly repayments until the loan is completely paid off.
If your lender allows you to repay your loan ahead of time without charging a prepayment penalty, you could stand to save on interest. That is, as long as your loan repayments all go toward paying off interest and the amount you borrow. It’s not uncommon for installment loan providers to charge interest-only repayments in the beginning, meaning that you can’t save on interest by paying it off early.