Installment Loans for Bad Credit
Even if you don't have the best credit score, you may still qualify for an installment loan with bad credit. With an installment loan, you can take out a set amount of money at once and repay it over time via fixed payments.
To determine whether to approve you for an installment loan for bad credit, some lenders will consider your available income and current debt, rather than solely your credit score or credit history. Let's dive deeper into how installment loans for bad credit work, whether people can get one online, and how to apply for one.
How do installment loans for bad credit work?
Installment loans are short-term, unsecured loans that let you borrow a lump sum of money. You’ll then pay back the loan in fixed monthly payments, or installments. Many lenders offer easy online applications, so borrowers may be able to apply for an installment loan in just a few minutes. If approved, you may receive the funds in your bank account the same day you apply or within 24 hours.
Many lenders that offer installment loans for bad credit will consider other factors when deciding whether to approve you, like your income, employment history, and current debts. This means that borrowers with poor and fair credit may get approved.
What is considered bad credit for installment loans?
Most credit scores range from 300 to 850. The higher your credit score is, the better your credit is and the more responisble you'll appear as a borrower. Here's a look at the common credit score ranges and their ratings.
If your credit score is on the low side (typically in the Fair or Very Poor ranges), you may find it difficult to get approved for a personal loan. This is because lenders will likely view you as a risky borrower who may not repay a loan.
However, payday loans, installment loans, title loans, and lines of credit from Advance America will not disqualify people based on their credit score alone. This option allows borrowers with bad credit to be eligible to apply and possibly earn loan approval when they need money most.
Can I get an installment loan with bad credit?
Even if you have bad credit, you can still get approved for and receive an installment loan. Many lenders are flexible and willing to accept borrowers, regardless of their credit scores. These lenders may consider other factors like your income and employment situation when deciding whether to approve you.
Can I get an installment loan for bad credit online?
Yes, you may get an installment loan for bad credit online. To do so, you should visit the lender’s website and fill out a short online application form with details about yourself and your finances. You won’t ever have to drive to a bank or other financial institution or leave your home to apply for a loan and collect the funds.
Comparing installment loans for bad credit
Not all installment loans online are created equal - whether people have good credit, bad credit or poor credit. That's why it's important to compare the various options at your disposal. When you do so, pay attention to the following.
The higher the interest rate is, the more the loan will cost over the life of the entire loan. Fortunately, Advance America offers small dollar installment loans for borrowers with various credit scores, whether bad credit, poor credit or good credit, featuring interest rates that can match your budget.
A longer loan term means lower monthly payments. On the other hand, a shorter loan term can save you money on interest charges. If you opt for an installment loan for bad credit from Advance America, you'll have anywhere from 3 to 36 months to pay it back (depending on the state and loan amount) and we will work with you to make sure the repayment schedule fits your budget.
Some lenders are more reliable than others. So it's a good idea to do some research and read customer reviews to learn about which ones you can trust. Advance America has offered installment loans for poor credit since 1997 and earned the support of countless satisfied customers, along with an A+ rating from the Better Business Bureau. Using a direct lender like Advance America can also provide benefits to save you money and speed up your funding when compared against loan brokers or lead generators.
In a perfect world, you'd make all your payments on time. Since this may not be realistic, you should familiarize yourself with any fees that lenders may charge for missed or late payments. Advance America's personal installment loans for borrowers with bad credit can include a flat fee or daily interest bearing loans.
Installment loans vs. payday loans
While installment loans and payday loans are both loan options for people with bad credit, there are significant differences between them.
|What They Are||Borrowing Limits||How Repayment Works|
Longer-term loans that allow you to borrow a set amount of money and repay it over time.
Up to $3,000 (depends on your state of residence).
You'll repay them over 3 to 36 months via fixed monthly payments.
Short-term loans that help cover your expenses until you get your next paycheck.
Up to $1,000 depending on your state.
You'll pay them back typically within two to four weeks. This normally aligns with your pay dates.
Payday loans for bad credit are often used for emergency expenses, so you can get quick cash and repay it within a few weeks. Installment loans for bad credit allow you to finance larger expenses, like a new appliance or big home repair, by spreading out repayment over a timeline that meets your needs.
Installment loans for bad credit: pros & cons
As with all financial products, installment loans come with their own set of advantages and drawbacks including:
Pros of installment loans for bad credit
- Flexible repayment terms: With an personal installment loan for bad credit, people can choose a short- or long-term repayment period to meet their unique budget and preferences. Repayment terms typically range from 3 to 36 months. This loan term can also be dependent on the loan amount.
- Higher borrowing limits: Compared to other types of loans which may only allow you to borrow a couple hundred dollars, an installment loan for bad credit offers higher borrowing limits.
- Fixed monthly payments: Since you'll pay back an installment loan for bad credit through fixed monthly payments, you'll find it easy to budget for.
Cons of installment loans for bad credit
- Potential fees: Depending on the installment loan for bad credit you choose, you may have to pay hefty fees for things like origination, prepayment, and late payments. Advance America, however, does not assess additional fees when you repay a loan early.
- Potential high interest: Your installment loan for bad credit may have a high interest rate that makes it costly in the long run, when compared with a secured loan like a home equity loan.
What can an installment loan for bad credit be used for?
An installment loan for bad credit is a versatile product that people can use for a number of common expenses including:
Home and car repairs
Unfortunately, home and car repairs pop up when we least expect them to. An installment loan for bad credit can help you out when you need new tires, have a leaky water heater, or need to replace your roof.
Even if you have health insurance, you may face an expensive medical bill at some point in time. With an personal installment loan for bad credit, you can cover a surgery or medical procedure with ease.
Maybe you have to pay for a loved one's funeral or perhaps you have to take care of a larger-than expected tax bill. Whatever your unexpected expense may be, an installment loan for bad credit can be a quick solution, even if you don't have an excellent credit score.
What you’ll need to get installment loans for bad credit
To get an installment loan for bad credit, keep the following information and documents on hand.
- A government-issued ID like a driver’s license or passport
- Proof of income in the form of pay stubs, tax forms, or bank statements
- Social Security Number
- Valid and active checking account
- Monthly income and housing payment
How to apply for an installment loan for bad credit
Whether you have bad credit or good credit, anyone can apply for an installment loan for bad credit. To apply for an installment loan, borrowers can follow these steps.
1. Compare installment loan options
Don't settle for the first installment loan you find. Do some research and compare your options. Choose the one that offers fast approvals, lenient credit requirements, a borrowing limit that meets your needs, a competitive interest rate, and the most favorable terms.
2. Prepare documents
Before you apply for an installment loan for bad credit, gather a driver's license or another type of government ID, banking details for direct deposit, your Social Security number, and recent proof of income.
3. Submit application
Some lenders will only allow you to apply online while others will give you the option to apply in-person. Regardless, be sure to fill out the installment loan application thoroughly and accurately to avoid delays.
4. Receive funding
Wait until you get approved for the installment loan for bad credit and receive the funds. To collect them as soon as possible, sign up for direct deposit or apply directly at a nearby Advance America location.
5. Repay the installment loan for bad credit
Be diligent and make every effort to repay your installment loan for bad credit in full every month. You may want to enroll in automatic withdrawals or set up calendar reminders so you never miss a payment.
How to improve your credit
Even though there are installment loans are available for consumers that have bad credit or good credit, it's wise to improve your credit before you borrow money. Improving your credit score can help you increase the amount you can borrow, while making approval for your loans and lines of credit even simpler. Here are some tips that can help people do just that.
Pay your bills on time
Pay your mortgage, rent, credit cards, car loans, and other bills on time every month. Even one missed payment can ding your credit so it's important to keep your bills top of mind. Consider automating your payments to make sure you don't miss any payments.
Keep your credit balances low
Try to keep your credit balances to no more than 30% of the credit available to you. For example, if you have a credit card with a $5,000 limit, your balance should never be more than $1,500. By either paying down your debt or increasing your credit limits, you can improve this credit utilization ratio, which can help you increase your credit score.
Check your credit reports
Go to AnnualCreditReport.com to get copies of your credit reports from the three major bureaus: Experian, Equifax, and TransUnion. Take a close look at each report and dispute any errors or inaccuracies: fixing incorrect reporting can immediately boost your credit score. With your credit report in hand, you can also identify the reasons for a bad credit score to help you avoid that type of credit behavior going forward.
Don't apply for new accounts too often
Every time you apply for a new line of credit, a hard inquiry shows up on your credit report and has the potential to lower your score temporarily. For this reason, don't apply for new credit unless you absolutely need to.
Fortunately, a perfect credit score is not required if you want to take out an installment loan. There are installment loans online for bad credit that can help you make it through any financial obstacle.
The above information is provided for informational use only. Advance America is not responsible for any loss or damage resulting from your reliance on the material provided. This information is accurate as of the time it is posted; but it may not be updated regularly, so it may not be current information depending on when you read it. You should consult with your own financial professional when making financial decisions.