4 Potential Benefits of Installment Loans OnlinePublished on January 21, 2022 by Daniel Azzoli
As nice as it would be to have on hand, not every person is fortunate enough to have an emergency fund ready and waiting to help when an unexpected expense rears its ugly head. Whether a tight budget has prevented you from building one or it’s just never occurred to you to save money for this reason, getting caught without a safety net in times of emergency can be tricky to manage.
If you find yourself in this type of situation, you might be tempted to look to certain types of cash advance loans to help you find a financial product suited to your circumstances.
One of these potential options are short-term installment loans online. These loans can be useful when you need funds to help you handle an emergency expense and have nowhere else to turn. We’re going to take a look at them in more detail and go over some of their potential benefits.
What are Installment Loans Online?
In broad terms, installment loans are loan products that provide you with a lump sum, if approved. You’ll then need to pay back the loan with interest and/or fees over the course of several months to several years. These payments will be made on a pre-determined schedule, and the length of the repayment period can vary based on several different factors, like:
- The type of installment loan
- Your income
- Your pay schedule
- The financial institution providing the loan
There are several different types of installment loans out there, some of which you may already be familiar with. These include things like mortgages, student loans, auto loans, and more.
While some of the things we’ll be going over in this article will apply to all types of installment loans, we’re going to be focusing more specifically on short-term installment loans online, which are usually intended to be used to help you pay for emergency expenses when you don’t have a financial safety net in place.
But when does the “online” component come into play? While installment loans are available through storefront lenders, there are also some that are offered over the internet. There are a few important distinctions that you might find between these loans and those you’d apply for through a storefront lender.
Benefits of Installment Loans Online
Depending on your circumstances, you may find that online installment loans suit your financial situation better than in-person loans. But how exactly? Let’s take a look at some of the potential benefits of these online loans.
1. Simple and Fast Application Process
If you make the decision to apply for an installment loan from a storefront lender, the whole application process may sometimes take several weeks from start to finish. The problem here is that when you need money to help you deal with an emergency expense, you may not have much time to spare. After all, the longer you let an immediate need linger, the worse it may become.
Applying for installment loans online may provide you with the quick and straightforward application process that you’re looking for in a time of need. Many financial institutions that offer online loans will have an application that generally takes only minutes to fill out. This can apply to other online loans too, like online lines of credit, and more.
2. Apply Any Time of the Day
When it comes to applying for a loan at a storefront lender, you’ll often need to work around their specific business hours, find time in your schedule to travel to a physical location, and wait in line to speak to a clerk.
With online loans, this isn’t the case. On top of being fast, many online installment loan applications can be started 24 hours a day, 7 days a week. There’ll be no travel time to factor in, no lines to worry about, and you can apply for them wherever you have internet access. This can be a huge benefit when you need a quick influx of money to help out in an emergency situation.
3. Options for Different Kinds of Credit Ratings
For some people, having bad credit can be a big roadblock to getting approved for a loan of any kind. After all, as a potential customer, your credit score is one of the main factors a financial institution may look at to assess your ability to repay what you’ve borrowed. In the sphere of online loans, there may be more options available for people with a relatively poor credit history. This is good news for anyone with bad credit who’s in need of money for an emergency situation.
With certain financial institutions that offer or service short-term loans online, credit scores may not be the primary factor they look at when determining someone’s creditworthiness. Instead, they may focus more on things like your income, employment situation, and various other factors.
This means that even if you’ve had some financial issues in the past that have led to a spotty credit history, you may still be able to find installment loans for bad credit that you can qualify for.
4. They can Help with Emergency Expenses
While everyone would prefer not to have to deal with them, unexpected emergencies are nearly impossible to avoid. Maybe your car gets a flat tire on your way to work, or you come home one day to find that a leaky pipe has caused some water damage in your house. You may even need to make an unexpected trip to the emergency room. Whatever it is, these things don’t come cheap. When you don’t have the funds to manage them out of pocket, short-term installment loans online may be a potential short-term solution.
Let’s take a look at an example to help illustrate the point. Imagine you’re on your usual commute to work when all of a sudden you start to feel the telltale signs that a tire on your car is quickly losing air. You pull over and decide you’re going to need to get your car towed to your mechanic.
Now, this may not seem like an immediate need for everyone. Maybe outside of your commute, you don’t use your car often and you’re able to take public transportation to get to work until you save up enough money to get your tire fixed or replaced. But for some people, their car is too integral to their life to go even a few days without one. Maybe it’s your only way of getting to work, and maybe missing shifts at work will mean having to deal with a lighter paycheck. Whatever the case may be, installment loans online may be able to provide you with the money you need to take care of this short-term emergency expense while you manage the payments down the road.
Pay Attention to your Payment Schedule
When it comes to paying back online installment loans, your payments will generally be scheduled based on when you get your paycheck from your primary workplace. If the money for your payment is going to be withdrawn automatically from your bank account, make sure you’ve circled this date in your calendar. This can help you to avoid any potential discrepancies that may come up. For example, you’ll want to make sure you’ve marked instances where your payment is due on a holiday or a weekend. If the day in which your paycheck is deposited gets moved for some reason, you’ll want to make sure you let the financial institution know ahead of time to try to avoid any penalties that come with late payments.
You’ll also want to ensure that you have a clear understanding of how much your loan will be costing you, whether or not you can make early payments without incurring an extra fee, and that there aren’t any mistakes in your payment schedule.
Review your Potential Options
If you run into an emergency expense at any point, you’ll want to have a clear understanding of what your potential options are. Like we said, it’s important to have an emergency fund at the ready to help in these situations, but if you don’t, there may be ways for you to get the funds you need.
Installment loans online may be a potential option, but make sure you take the time to explore what else is out there. Financial products like lines of credit and other types of personal loans may also be suited to your situation, so do your research and look for something that works for you.