Sometimes, you can hold off borrowing money until the timing’s right, when your credit score is almost perfect, and you can hunt down a single-digit APR.
When this isn’t possible, you should have an emergency fund that can help you in a pinch. But what happens when your emergency fund is empty the day your emergency arrives?
While it will change how you approach your next loan, there is a way to borrow money responsibly. Here’s everything you need to know about online emergency installment loans.
What Are Online Installment Loans?
Getting an installment loan is much like any other unsecured personal loan. You’ll receive your cash electronically as one lump sum in your checking account without having to provide collateral.
What makes it stand out is how you pay it back. The installment loan’s defining feature is its repayment schedule. Rather than paying everything back in one lump sum, you’ll make smaller, regularly occurring payments.
As an emergency loan, they tend to give you a relatively small amount of funds, ranging between $200 to $3,000.
This may be the perfect amount for minor yet urgent household repairs, auto repairs, and medical bills, but it will likely be too small for large, planned purchases like a car or piece of property.
How much you end up getting depends on your lender, as they set your borrowing limits, rates, and terms. Most lenders, including the installment loan specialists at MoneyKey, make this clear from the start. If you visit Moneykey.com, you can see these details once you look at the installment loans available in specific states.
These details may also depend on your finances. Your credit score and income may affect what your lender is willing to provide.
Why Go Online for a Loan?
People have been borrowing in-person for thousands of years, so why would you want to make the switch to online lending? Well, it comes with all of these benefits:
- Convenient Applications Available 24/7
- Fast, Electronic Disbursement
- Mobile-Friendly Payment Options
- No Need for In-Person Transactions
- Rapid, Friendly Customer Service
Bad Credit Installment Loans
Generally speaking, it’s best to wait until you have a prime credit score to borrow money. However, improving credit takes time — sometimes, as long as seven years when negative entries may drop off your record.
If you don’t have the better part of a decade to spend improving your score, there are lenders willing to work with your bad credit. However, you may end up paying higher rates to offset the risk these loan lenders take on.
How Are They Different from Payday Loans?
Another popular unsecured emergency loan is the payday loan. Direct lender payday loans provide a small amount of money upfront to help with unexpected emergency expenses when your savings are low.
How they differ from emergency installment loans is their repayment.
You must repay direct lender payday loans in one payment. This may be hard to manage if you live on a shoestring budget. Between the principal and the interest, this payment may be more than you can manage to scrounge together all at once.
The installment loan’s longer term may make it a more manageable alternative — even if your rates equal to the same cost of borrowing. By breaking this cost into smaller payments, you may find it easier to handle this bill in your monthly budget.
How to Find Online Installment Loans
If you can shop on Prime Day, then you can probably find an online loan. Both tasks take about as much Internet literacy. As long as you have an Internet-enabled device, you can fill out an application.
Here are some pointers to help you search out the best possible loan for your needs.
Before you type the first letter of your name in the application, make sure you compare your options. You don’t want to go with the first lender that you come across. There’s no way to know for sure they offer a responsible borrowing option until you see what other lenders are offering.
Comparing your options is a fantastic learning tool anytime you want to borrow money — and not just in an emergency. It gives you a chance to understand the typical costs of borrowing for that type of loan. All your hard work may also help you lock into the best possible deal for your credit score.
Comparison shopping will help you narrow down on rates and terms that you like, but you aren’t done yet. All this information comes from a lender’s website, which is a highly curated space. They won’t broadcast any of their potential weaknesses here.
To get that sort of scoop, you’ll want to look at online reviews. They afford you a second opinion from a lender’s past customers. Their reviews will let you know if a lender makes good on the promises they make on their website.
While reading the best and worst reviews can give you insight into their services, the average overall mark is also important.
Typing in a lender’s name and the word “review” after it in a Google search will bring up a lot of good information.
However, you can search these targeted review sites for more data:
Read the Terms and Conditions
Once you have a contract in your hands, give it a final read through to ensure you understand everything there is to know about your agreement.
Now’s not the time to be quiet. If you have a question, ask your lender for them to explain what it means. Better yet, hit the web to double-check that they’re giving you a legitimate answer.
Only sign the contract when you’re comfortable you understand the full terms and conditions of your loan. This will you get the best deal for your loan because there won’t be any hidden fees bloating your bill.