An online installment loan is also called a non-bank loan. The differences in names are due to the similarity to other financial products, but you should know that they differ quite significantly. It is the most flexible form of a non-bank loan. As part of this offer, you can obtain financing in the amount of 5,000$, and the repayment can be divided into equal installments, for a period of up to 6 years. Taking advantage of a long-term loan is the possibility of spreading the liability into many small installments. This solution will allow you to quickly repair your home budget, and you will not feel a burden.
An online loan in installments is currently the best alternative for customers who do not want or cannot use bank loans and the payday loan does not meet their needs. The application process is quick, simple and does not require as many formalities as when using bank loans. Although banking products are often called loans, they are different financial products.
Loan amounts and repayment periods
There are many different companies that specialize in providing loans in installments on the non-banking market. The offers of individual loan companies differ in terms of available amounts and repayment time. On the Internet you can find loans for the amount from $1,000 to 5,000. As the name of the product indicates, the repayment of the liability takes place in equal, monthly installments.
Installment loan types
Installment loans include several subgroups, which in turn denote different types of loans:
- This type of loan is usually issued for a period of 15 to 30 years for the purchase of housing.
- Title loans. A loan that is issued in the amount of 25 to 50 percent of the value of the car, which is the collateral for obtaining a loan.
- Student loans. A loan which is issued for education expenses.
- Personal loans. A loan created for absolutely any purpose, which can be it a holiday, medical expenses, vacation, etc.
Characteristics of installment loans via the Internet:
- The smallest loan available starts at $1,000;
- The maximum amount you can receive is up to $5,000;
- The amount of the first loan may be limited to a certain limit;
- The minimum number of installments starts from 2 months;
- The maximum debt repayment period is 7 years, but the market standard is 36 – 48 months;
- The longer the repayment period, the higher the total cost of the loan;
- Most institutions do not require a certificate from the employer.
Installment loan costs
The costs that may occur with this form of financing include:
- capital – that is, the amount borrowed;
- interest rate;
- penalty for delay in repayment;
- non-interest costs, including: commission, the amount of which depends on the actual loan period, extension cost or reminders.
In the case of a long-term loan, the borrower must take into account costs. Their amount largely results from the duration of the contract, the loan amount and the interest rate, known as interest costs. In addition, there are non-interest costs, i.e. additional fees: a commission for granting a consumer loan, an intermediary’s commission – charged in the case of stationary loans or with service at the customer’s home, fees for additional services: issuing documents of various types or extending the repayment date.
All the above costs contribute to the total amount to be repaid. Repayment is made in equal installments. The amount of installments depends on the amount and time of repayment of the consumer loan – the longer the period and the smaller the amount requested, the lower the installment.
The exact amount and rules for calculating individual costs are described in the information form and the loan agreement. It is important to know that the commission is the main factor affecting the total amount payable. It is much higher than in the case of bank loans and this is due to the fact that lenders do not require insurance or pledges.
What is the APR in an installment loan?
The APR is the Annual Percentage Rate. The indicator expressed as a percentage shows the total cost of a consumer loan per year. The APR consists of all the above-mentioned costs, i.e. not only capital and interest, but also the commission. The formula for its calculation is not simple, but you do not need to use it, because you can easily calculate it using the APR calculator.
The indicator can be used to compare offers, but it will only make sense when compiling loans with the same parameters: the same amount and loan duration. Thanks to this, you can save time comparing individual costs and find out the profitability of several loan offers.
What conditions must be met to take out an installment loan?
Non-bank institutions have relatively easy to meet conditions for obtaining cash. They are definitely less stringent than in the case of banks, but they should not be underestimated. Failure to meet the basic requirements will result in the rejection of the application. The requirements vary widely, but in most cases they are:
- appropriate age – lenders set different limits, but on the market we can find loans from 18 years as well as for retirees;
- demonstrating permanent and regular income – various sources and forms of employment are accepted;
- having an active phone number and e-mail address;
- a personal account at a bank operating in the country;
- address of residence in the USA;
- American citizenship and valid ID card.
Income sources accepted by the lenders
Loan institutions also set conditions that are easier to meet in terms of the form of employment and the amount of earnings. When assessing financial credibility, the most important thing is to demonstrate a fixed and regular income that allows for timely repayment of installments. The borrower may indicate several different sources of income.
You will get a non-bank loan in installments by showing your remuneration, among others With:
- contracts of employment / specific task / order;
- lease and tenancy agreements;
- contract of uniformed / managerial services;
- economic or agricultural activity;
- part-time work;
- some social benefits, e.g. for the temporarily unemployed;
- earnings from abroad transferred to an American account.
Documents needed to obtain an online installment loan
The list of documents needed to receive it varies depending on the specific offer and the institution to which we go for the money. In most cases, companies grant loans in installments without the need to present earnings and employment certificates. Having an identity document is necessary in each case to complete the loan application as well as for verification, because the customer’s identity can be checked on the basis of the number and series of the ID card.
However, this does not mean that every loan company will grant you a loan for evidence alone. Different institutions may require different documents and additional certificates.
A representative of the loan institution may ask you to provide:
- a document confirming the address of residence, e.g. a utility bill;
- certificates of employment and earnings;
- personal account statement for a period of several months;
- scan or photo of ID card.
Loan companies perfectly understand the needs of their clients and in most cases, you do not need to send any documents to take out an online loan in installments. Paper documents or delivered electronically are only necessary for home loans or when we cannot confirm the salary using modern techniques.
Online installment loan without credit check – is it possible?
Some brokers and loan companies advertise their services by offering the so-called installment loans without credit check. A quick loan without credit check means that you will receive money despite the information found about your creditworthiness. This is an opportunity for customers who have a negative credit history, e.g. had frequent delays in paying installments and therefore their scoring is low.