4 Tips To Help You Attain A Loan From A Reputable Lending Source
Do Your Research
Installment loans are offered through credit unions, banks, no short-term, no-credit-check lenders and online lenders. The no credit check lenders often also offer auto title loans and payday loans and is a horrible option to go with.
You still got an array of options to choose from.
Be sure you talk with your bank to see what kinds of installment options are available to you before any other options were considered. They may offer you a favorable repayment term and/or a low-interest rate. If you’ve established a rapport with the bank, they may be more amicable to giving you a loan.
Credit unions are also a worthwhile option if you don’t think a traditional bank will acquiesce to your application. In fact, they tend to look at each case individually.
Online lenders are another worthwhile option – they are generally more convenient and provide you with a quick answer. But, the APRs of these loans are generally higher – a price for the convenience. There are several websites you can consider help from PersonalLoans.com, CreditKarma.com, etc.
Do You Use A Credit Card
There may be some instances where a credit card is the better choice in lieu of installment loans. This is the case if your credit is great and a low APR introductory offer – sometimes you may get a zero percentage rate. However, in order to get the best deal, you should consider paying the credit card off before that rate expires.
And, if you find yourself needing more time or money than the card will allow, this is where an installment loan is your best friend. While you’ll need to pay the origination fee, it’s easier to adjust your budget for a fixed monthly loan payment.
Plus, if you pay on your installment loans, you can raise your credit score. If you place a large amount of money on a credit card, the score goes down.
Look At The Fees
It’s important to remember that installment loans have an origination fee, ranging from one percent to six percent of the whole loan amount. The loan’s APR needs to take this into consideration. Make sure you find this out.
Find out what kinds of fees the lender changes – late fees, check fees, unsuccessful payment fees, etc. Don’t go with any lender that will charge you a prepayment fee to pay the loan off early. Some lenders will charge this fee because they don’t want you paying off the loan early. After all, they make money from the money you pay each month.
Borrow Only The Amount You Need
Each lender has their own terms of repayment. Some may opt for a certain term while others choose from more than one term. Some lenders may decide that you can choose a term range for yourself. Bear in mind this: the longer the loan is, the more interest you’re going to pay. However, your monthly payments are going to be lower.
If you get an $8,000 installment loan with a 12 percent interest rate for two years, you’ll pay more than $9,000 over the loan. If three years is required to pay the loan back, the total loan repayment will be $9,566. At four years, the amount will be $10,112. A short term loan repayment will be $377 for two years, $266 for three years and $211 for four years. If you can pay the higher monthly payments, go for it.
How Can You Choose The Best Possible Installment Loans
In order to get the best installment loan, you want companies to provide you with a competitive APR and repayment terms. Be sure you look for lenders that are transparent. You want a lender who is clear about their fees and APRs and match them against each other. Look at their frequently asked questions section to see how they addressed the common concerns people have. What kinds of tools do they offer?
Should you look at the reviews of each lender? While they can be good, you need to bear in mind that some of the negative reviews could be the result of customers unhappy being turned down. Also look at the BBB and accreditation to see how they rank.
When you need an installment loan, make sure you choose a highly knowledgeable and experienced lender that does an in-depth credit check. While you may be tempted to go with a finance company that does no credit checks, bear in mind that they have high APRs and other negative aspects to them that could put you in a never-ending debt cycle.
Trustworthy lenders don’t “beg” you to borrow more from them. Therefore, look at them first before you settle on a predatory loan lender.