Getting installment loans online isn’t as complicated as it sounds. Knowing where to start, what information you need, and how to compare your options will put you on the right track.
We’ve created this guide to help you understand the online loan process. The steps for online installment loans are generally the same but can be different from one lender to the next. Be sure you check your specific lender or location’s process when you apply.
Research Online Installment Loan Lenders
If you’re considering an online installment loan, be sure to research potential lenders thoroughly to guarantee your lender is legit. How do you do that?
First, look for a trustworthy lender. Make sure the lender is registered in your state with the Federal Trade Commission.
Next, check potential lenders’ communications. Make sure a lender is communicating appropriately (professionally) and reliably with you. Do an online search and check out the lender’s website – is it easy to use and professional? You’ll want a way to access a human for help if you need it, so check for a customer service phone number.
Next, examine lenders’ reliability. Be sure the lender is registered with the Better Business Bureau and has a good rating. Check other rating systems like TrustPilot, and read other borrowers’ comments. If you see one unhappy person, there may not be an issue; if you see a pattern of problems, you probably want to stay away. You can also ask friends if they’ve had a good experience with a lender.
Finally, check for data safety. Lenders should require both a password and a second verification that it’s really you, like a code sent to you via email or text. Also, make sure their URL (web address) begins with “https.” The “s” at the end means it’s a secure site.
What are the best online installment loans? Ultimately, you have to determine the best lender for your needs. The one that loans with the timeline you need, offers payments you can comfortably make, will lend for your credit score, and is trustworthy is probably your best choice.
While there’s no such thing as instant loans, online loans typically process quickly. Some lenders will process the loan more quickly than others, so factor this in too if you need the money urgently.
Having trouble deciding between an online or in-person loan? If you decide you’d be more comfortable borrowing from a lender with a physical location, try searching online for “installment loans near me.”
Review Your Credit Score
In addition to researching lenders, you’ll want to review your credit score. If this term is new to you, check out What Is a Credit Score to learn more about how these scores work.
Lenders perform credit checks as part of the application process, so you’ll want to know your score. Your credit history may influence the interest rate you can get. Borrowers with the best scores qualify for the best rates and terms; as you go down the credit score spectrum, lending options may decrease.
Are there online loans for bad credit? Though it may depend on your credit score and history, online installment loans are generally available for challenging or bad credit. But a challenging credit history could mean you’ll pay a higher interest rate, have fewer lending options, or may not qualify for the best terms.
Try searching “bad credit loans online” to find online lenders willing to work with applicants who have bad credit. Be sure to evaluate them using the tips in the first section to ensure they’re legitimate and reliable.
Check Eligibility Requirements
To be eligible for most loans, you need to meet certain eligibility requirements. These will vary by lender, but you’ll usually be asked for the following information:
- Your full name
- Your age and proof of identity
- Income details
- Your social security number
When you’re ready to apply, check your specific lender’s requirements.
Gather Necessary Documents
Like in-person lenders, online lenders will ask you to provide documentation that proves your identity, employment, and residency. This could include proof of income like a pay stub, a valid government ID, your checkbook or checking account’s routing and account numbers, and your social security number. It could also include a utility bill or other documents.
When you’re ready to apply, check the lender’s requirements so you can gather the right information in advance.
Calculate Installment Loan Amount
It may seem obvious, but you need to decide how much you need to borrow. It’s important to borrow only what you need, especially if you have challenging credit. This is both because it’s costing you significant interest on what you borrow and because you need to have a comfortable monthly payment.
An installment loan calculator may help you identify the right amount and payment for you. These can help you calculate installment loan payoff dates and may help you compare loans if you are shopping for the best overall deal.
Installment loan calculators can also help you understand the costs involved with one loan vs. another. Sometimes lenders will have origination fees, which cover the cost of processing your loan application and approval. They could also charge a flat rate or a percentage of the loan amount. These amounts are typically taken from the loan, so they reduce the cash you receive. If you need a specific amount, be certain to factor in any fees.
Once you know how much you need to borrow and your credit score, and you’ve researched and selected one to three possible lenders who meet your needs, it’s a good idea to pre-qualify. This gives you a good sense of whether you will be approved by the lenders.
Also, most online lenders only perform a “soft” credit check during pre-qualification, which will not affect your credit score. Pre-qualification is the best way to limit hard credit checks on your account, which can negatively impact your credit score.
A pre-qualification also allows you to see the rate and terms an online lender will likely offer you, which allows you to compare lending options more easily.
Begin the Installment Loan Online Application
Once you’ve selected and pre-qualified with a lender, it’s time to begin the online installment loan application process. This is where the hard credit check takes place.
You will typically go to the lender’s website and click a link to apply online. You may be asked to create a login with a username and password. You’ll also fill in the required information electronically.
Make sure you read and understand the terms when you are asked to review them. (If you have questions about the terms or anything else, it’s a good idea to do more research, look at the lender’s website, or contact the lender’s customer service department before proceeding with an application.)
You will then be asked to sign and submit your application.
Remember, the lender will evaluate your application in several ways. They will look at your credit score and history, which tend to weigh heavily. A lender will also validate your identity, your income, and your other documents.
Once your application is evaluated, you will receive either an approval with an amount they are willing to loan you, or a denial. It may take a day or several to receive a decision on your application. Lenders are required to explain any denials. (If you are denied, it’s a good idea to try to improve your credit score and any issues the lender identified before applying again.)
Accept the Loan Agreement
If you are approved for a loan, the lender will notify you. They’ll ask you to complete your paperwork by accepting the official loan agreement. Be sure to read the agreement – you should always know what you’re agreeing to.
With an online installment loan, you will be asked for electronic consent with an e-signature. You may be asked to click to agree and “sign,” or you may be asked to write your name on the screen with your finger.
Your application is not complete until you accept the loan agreement. If you are approved but do not complete the loan agreement, your lender may send you reminders. Because once your offer expires, you may have to go through the application process again – with another hard credit check.
Receive Funds
Once you have accepted your loan agreement, your funds will be released to you. This may happen within a day or could take several. Be sure to check with your lender so you know when to expect the money. It will usually be sent directly to the bank account you provided during the application process.
Once the funds arrive, they are yours to spend.
Personal Installment Loan Repayment
Remember to make your monthly payments according to the schedule as you agreed, and make a plan to manage them. Setting up automatic payments can help you pay on time without having to remember any due dates.
Most importantly, don’t miss payments. If you find yourself in a crisis and you know you’ll miss a payment, contact your lender and see if they can help. They may be able to offer a later due date, a deferred payment plan, or other accommodations. Never miss payments and ghost the lender – it could cost you a lot of money in late fees, badly affect your credit, and hurt your ability to borrow in the future.
Consistently paying on time until the loan is fully paid off isn’t just the right thing to do – it can help your credit score and bring you closer to financial freedom.
FAQs: Online Installment Loan FAQs
What is the easiest installment loan to get?
The easiest installment loan to get is the one you qualify for. Do your research and follow the steps above, including pre-approval, to find the best option for you.
How to borrow $500 quickly?
You can get a $500 loan quickly with a personal loan, a cash advance, a credit card cash advance, or a payday loan. Some options are better than others because of the costs associated. Also, some loans get you cash more quickly than others. Do your research and follow the steps above to find the best option for you.
How can I borrow money immediately?
If you need money quickly for an emergency, the most popular options are credit card cash advances, payday loans, pawnshop loans, and emergency installment loans. Check out What To Do If You Need Money Urgently for more information.
