People with good credit are typically offered better terms when it comes to getting a mortgage or other kinds of loans. However, this isn’t always the case. There are other kinds of loans, usually referred to as “pre-approved installment loans”, where even those with bad credit can qualify for great rates and terms.
Defining Pre-Approved Installment Loans
A pre-approved installment loan is a type of credit that’s typically offered by smaller banks and credit unions to customers who don’t quite meet the criteria for other kinds of loans. While it sounds like an oxymoron, the fact is that there’s a difference between a pre-approved installment loan and an installment loan that is actually pre-approved. This kind of credit can be a great alternative for those who need some financial assistance but don’t have the perfect credit history. The key to getting a good deal on a pre-approved installment loan is to look for the right place to apply.
When To Consider Pre-Approved Installment Loans
If you’re looking for an installment loan but haven’t been able to secure the best possible deal because of your credit score, it’s worth considering applying for a pre-approved installment loan. This kind of loan is typically offered by smaller financial institutions and credit unions to customers with bad credit. If you meet the criteria for such a loan, you have the opportunity to get the best rate available and be on your way to securing your future finances with a manageable payment schedule. Keep in mind that these types of loans are subject to strict underwriting guidelines and credit approval.
Types Of Loans
There are several different types of loans available to customers who qualify for a pre-approved installment loan. Typically, these loans are based on the amount of credit that the applicant has available for borrowing, the borrower’s monthly income, and the length of the loan. While you might be tempted to choose a home equity loan or an unsecured personal loan because of their low rates and wide availability, be advised that these types of loans usually have extensive collateral requirements. This means that you’ll need to put in a substantial amount of equity as a down payment in order to secure the loan, plus pay additional fees and interest to the lender. An alternative that’s less risky is an automotive loan, which provides working capital for a business or individual.
If you decide that a pre-approved installment loan is the right financing option for you, be sure to consult with a reputable and experienced lender who can guide you through the application process and get the best possible deal for you.
Pros and cons of pre approved installment loans
Many individuals will consider a pre-approved installment loan because they want to avoid wasting time with paperwork. However, before you pick up that plastic, you should know the pros and cons. Here are some of the main points:
Time To Spend With Family
One of the major draws of a pre-approved installment loan is that you do not have to rush into signing contracts to begin with. The simple act of filling out a form and depositing it is often all that is required to begin the lending process. Once that is done, the processor will give you a date for a lender to review your application and reach out for a medical examination. After that, you will simply have to wait for the lender to either approve or decline your application. If they decline your application, you will then need to look for another lender who might be willing to offer you credit.
Fixed Rates
One of the major benefits of a pre-approved installment loan is that the rate of interest remains fixed for the entire duration of the loan. In comparison, most car loans have variable interest rates, which can change from day to day or from hour to hour. Since there is no such thing as a low interest rate, you will always be better off to ask for an installment loan than a credit card, which can give you variable rates and higher interest levels.
Flexibility
With an installment loan, you get to enjoy the flexibility of paying it back in installments. While you will have to commit to a certain number of payments at the time of application, the lender will generally allow you to make the payments any time within the year. In comparison, with a credit card, you will usually be charged interest on overdue accounts and fees for a late payment penalty. So, if you do not pay back an installment loan on time, you will not only damage your credit rating but you will also have to pay more in interest and fees to the lender.
More Information
Another major advantage of getting pre-approved for an installment loan is that you will get to review the entire application process and the terms and conditions of the loan in detail before you make a decision. Before you apply for a loan, you should always review the terms and conditions thoroughly because they can vary from one lender to the next. In addition, since you are not obligated to accept any particular loan once you have applied, you have the opportunity to compare several different offers and find the one that suits your needs best. Of course, you should pick up any paperwork and pay attention to detail to ensure everything is done correctly.
Reduced Fees
A significant cost reduction for a pre-approved installment loan is incurred through reduced fees. Not only do you not have to pay for an agency to process your application, you do not have to pay for a credit check either. The lender will either have your credit rating or they will do their own background check, which is usually done through an on-line service such as Experian. Since most lenders use the same credit checking service, you can expect to pay only the one fee for that service regardless of which lender you apply with.
On the cons side of a pre-approved installment loan, you should be aware of the following:
Increased Risk
When you get pre-approved for an installment loan, you are leaving yourself more open to the risk of default. In most cases, the lender will require you to put up a down payment or to put down a security deposit. If you do not have the money upfront and you do not meet the criteria for a loan, you will have to look for another lender or ask a friend or family member to help. In the event of economic hardship, you might have to find ways to make the payments yourself or ask for a financial assist from the government.
High Interest Rates
As mentioned before, the interest rate for a pre-approved installment is usually fixed for the duration of the loan. In some cases, that rate can be higher than if you had gotten the loan from a traditional bank. In order to balance that out, the lender will usually require you to sign a contract, which will protect the lender in the event of default. In that event, the lender can repossess your car and sell it to recover their investment.
With all the benefits and few cons, a pre-approved installment loan seems like a no-brainer. However, just because there is a simple application process does not mean that everyone who applies will qualify for a loan. You should always research the credit score and be sure you meet the minimum requirements before picking up that plastic.
What you’ll need to apply for a pre approved installment loans online?
If you’re looking for an easy way to get money fast, you’ve probably considered applying for an online installment loan. After all, isn’t the whole purpose of having cash in your bank account to pay for things? You’d think so, but applying for a conventional loan isn’t always as simple as it seems. You need to meet the right criteria, and you need to be sure that you’ll be approved before you make a commitment.
Here’s a quick guide to help you get a pre-approved installment loan online, so you can get cash quick and easy when you need it.
The Basics
Before you begin your search for a loan, it’s important to set some basic guidelines. First, make sure that you’re actually a legal citizen of the United States. Second, make sure that you have an active bank account. Third, have a steady source of income. Finally, decide how much you’re willing to spend on monthly payments and what type of loan you want to apply for (see below for more details). Having a good understanding of these basics will help you choose a loan that fits your needs. Now, let’s get to the fun part – searching for a loan!
Where to Look
Before you start applying for loans, you need to figure out where you’ll look for the money. There are a few different ways to get the cash you need, but you need to be aware of the various terms and conditions of each option. Here are the most common places to look for money when you need it:
- Credit Cards: If you’re already using a credit card, you have access to a large pool of money that you can access quickly. However, there are a few caveats that you need to be aware of. First, credit cards have extremely high interest rates, so the more you spend, the more you’ll pay in interest. Second, many credit cards have an annual fee, so be sure to check out whether or not that applies to your situation. Finally, make sure that you’re aware of the various credit card laws in your jurisdiction. Some states and cities have banned the practice of adding extra charges to your monthly credit card statement, so be sure to research whether or not that applies in your case.
- Debt Management Plans: If you’re looking for money to pay off debt, you can get an advance on your credit card or take out a loan in the form of a consolidation loan. This is generally a safer option than taking out a loan on your own, as debt collection agencies will not ruin your credit score when you make on-time payments.
- Loan Forgiveness Programs: More and more colleges and universities are offering forgiveness programs for student loans. If you’re facing a ton of debt and want to make your life a little easier, you can apply for loan forgiveness. Depending on your situation, you may be able to get up to $50,000 in debt forgiven. You’ll need to check with your loan provider to see if they offer such a program, as they may have individual policies on whether or not they offer this type of relief.
- Private Loans: If you’re unable to get loans from traditional lenders, there are private loan companies that specialize in providing loans to individuals with bad credit histories or no credit history at all. While these loans can be very expensive, it is a safe and viable option for those looking for quick cash.
- Secondary Lien Loans: If you’re looking for a personal loan and don’t want to put your house up as collateral, you can do so through a secondary lien loan. A secondary lien loan is one where your vehicle serves as collateral, meaning that if you don’t pay back the debt, the lien holder has the right to take your car. You’ll still need to qualify for a personal loan via a conventional lender, but you won’t need to put your car up as collateral. For more information on this topic, check out the secondary lien loan FAQ or contact a local lender. Some websites like LendEDU can connect you with lenders that specialize in this type of loan.
- Home Loan Modification: If your house is your sole source of income and you’re struggling to make your monthly payments, you can ask your mortgage lender to modify the terms of your loan. You’ll need to make some serious financial contributions to make this happen, but it’s worth it if you want to keep your house. Unfortunately, this option isn’t available to everyone, so it’s important to explore all of your options before making a decision.
- Start A Business _(Option): If you’re looking for a safe and easy way to make money, you can start a business. Many people make good livings online from home, and all you need to do is register with an entrepreneurship platform like Sprout and build a small business around a topic you’re passionate about. You can use the money you make to pay off your debt or save for a vacation or to invest in property.
- Takeout Loan _(Option): If you need money but don’t want to burden your friends and family, you can take out a loan. However, this option is not for everyone, so be careful about whom you ask. To qualify for a loan, you’ll need to prove to the lender that you’re a trustworthy person who can pay them back. If you’re looking to take out a loan but don’t have the funds available, apply for a personal loan first before resorting to this option.
- What About Bad Credit? _(Option): If you have bad credit or no credit history at all, it’s tough to get a loan. However, there are still options available to you, and it’s essential to research all of your options before making a decision. The best way to get a loan with bad credit is to establish or re-establish credit. The worst thing you can do is to simply walk into a loan shop and ask for money. Banks and lenders are incredibly picky about who they’ll lend to these days, so it’s essential to do your homework first.
- How Do I Qualify? _(Option): Once you’ve decided where you’ll look for the cash you need, it’s time to figure out how you’ll qualify for the loan. The best way to do this is by creating a budget and sticking to it, which we’ll discuss below.
Budgeting For Certainty
In the world of budgeting, there are two main schools of thought: certainty and flexibility. Certainty is the preferred method of most people, particularly those who want to keep their bank accounts and lifestyle unchanged. They don’t like the idea of budgeting because it limits their freedom of choice. As you’re probably aware, this is how most people live their lives, and it’s the reason why many struggle with debt. If you want to follow the same path, budgeting may not be for you, as you’ll be giving up a lot of your freedom of choice. Nevertheless, sometimes certainty is necessary, especially if you’re looking for a huge loan and don’t have the credit score to back it up. In these cases, flexibility is the key. You’ll need to be aware of this when you go into budgeting mode, but as soon as you do, it will become much easier. You’ll get so much joy out of planning your weekly meals and outings because you’ll know precisely how much you need to spend. This brings us to the next topic – creating your budget.
The Importance Of A Budget
In the world of finance, a budget is one of the most important tools you have. It offers you a way to see what your income is and what your expenses are, and it gives you a good idea of where you stand financially. Moreover, if you follow a smart budgeting strategy, you’ll be able to save a lot of money that you would have otherwise wasted on unnecessary expenses. Here’s the thing about budgets: they’re not just about numbers. You need to have a reason for creating one, and that reason should be to save money. Just because your income is higher than your expenses at the moment doesn’t mean that you’ll automatically be able to save a large amount of money. You need to have a purpose for creating a budget, and that reason should be to save, regardless of whether or not your income is higher than your expenses at the moment.
