If you need funds in the range of $100-$3,000 and do not want to put any collateral, you can get a small installment loan. One of its benefits is that it is not secured, meaning that even if something bad happened with your financial situation, it would not fall on those who helped you get the funds. This is the reason why financial institutions try to make these offers as attractive as possible. However, even those who can help get this type of loan should think about their other options before they go ahead and take their bills to default.
What is Small Installment Loans?
Small installment loans are usually secured by either the borrower’s property or that of a family member. Usually, it is used for a few weeks or months and relatively small compared to short-term installment loans. Normally it also allows for the early collection of amounts with significant levels of extension. An additional loan is a type of loan that is initially paid as an installment loan but can be converted to a conventional mortgage loan after some period, typically after some time in arrears.
What can cause arrears to be considered bad credit history?
The lenders considered the actual factors when conducting a credit check and deciding whether to give you the required loan amount on an installment basis or to decline you the loan amount at all include Your credit history. If you have a poor credit history, banks and other lending institutions will consider this factor while assessing your financial capacity. Suppose you have applied for a carload on an installment loan scheme, giving your personal financial details to the lending institution.
You will be asked to apply for a credit card first from another card-issuing bank so that the bank may assess your solvency before approving your car loan application. If you have good credit history available in your credit record, your application will most likely be approved. However, if you do not possess good credit history, your application will most likely be denied. This could mean that you may not get approved for any loan from any financial institution in this particular category of borrowing whatsoever until you would improve your credit history score by paying off your existing debts and, perhaps, even going so far as creating new lines of credit.
What do You Need to Get a Small Installment Loans?
Small installment loans are usually granted on secured loans. The property has to be yours or have the right to use it, as well as the borrower’s checkbook. What are the advantages of taking out small installment loans in comparison with unsecured loans and credit cards? A small installment loan is like a conventional loan that offers borrowers a nice amount of disposable income. The important thing is to pay back the loan at fixed times when interest repayments are due and not have to pay penalties for late payment.
Risks of Small Installment Loans
There are virtually no risks to you when borrowing money on a small installment loan, as long as you pay the payments back on time. However, if you miss a payment, sudden interest and penalty charges might be added to your original repayments schedule, plus you may end up with a higher interest rate, which would add to your monthly payments, making the loan more expensive than it should be.
Benefits of Small Installment Loans
- You can borrow low-value money to spend on whatever you want.
- You can take several installment loans regularly for any purpose instead of using your credit card.
- There is no need for collateral – as most people only have things they can’t sell but don’t want to give up.
- Small installment loans are a simple solution if you’re on a low income and don’t own valuable items (see the next benefit). 5
- It’s easier to get the money – even without collateral – because the customer base is broad.
- These loans are often from 50 – 100 dollars – so they are smaller than traditional car loans, home improvement loans, etc., but big enough to buy you dinner or shopping, for example.
Best Tips for Taking Out Small Installment Loans
- Borrow the loan that you can afford to pay back. A small installment loan helps you manage your cash flow more effectively. To avoid overindulging in spending, borrow from only a trustworthy lender (and not on a variable rate of interest) or another person.
- Set aside an emergency fund that covers unexpected cash expenses. It will be much harder to tackle debt when you don’t have cash reserves to back up your credit cards.
- Find a good credit union with flexible repayment terms. Getting a loan through an institution that won’t impose stricter rules on you will give you more flexibility when paying it back.
- Get a refund anticipation loan from your tax agency if you can’t wait for your refunds. It would help if you were responsible enough not to spend additional portions of the money that’s already provided by your employer for your payroll taxes.
How to Apply for Small Installment Loans?
Small installment loans are much easier to qualify for and more convenient than mortgages or personal bank loans. The following describes the simple steps needed to apply for small installment loans.
- Gather all of the required documents such as a valid identification card, social security number, federal tax refund information, and other available copies. Documents verification is a necessary step in providing small installment loans for applicants. Applicants can be completed within minutes with nothing but a few documents in hand.
- Enter your own information on the website of any qualified lending institution (IKI). This can be done easily by filling out the online application form. Through this, you will be able to look at your application status and view relevant documents that they have already faxed to them before you can finally pay for it and obtain an approval letter that will normally contain the details of your future loan repayment schedule.
- Pay for your loan guidance package containing short-term pay advance plans.