The high number of borrowers who take online installment loans is not to be overstated. Many people borrow money through an installment loan to cover various expenses.
The reason for the popularity of this loan option is the fact that it is easy to apply for it. The borrower can also receive the funds he needs immediately after compliance with the requirements. If you do not know anything about online installment loans, learn about this loan option from this blog article.
What are Installment Loans?
An installment loan is a financing option that can be paid in a series of payments during its prescribed period. There are various names of loans under installment loans, such as home loans, auto loans, and student loans. Depending on the lender, a borrower can pay this loan option monthly, quarterly, weekly, or bi-weekly.
Almost all lenders offer installment loans, including banks and credit unions. But when it comes to online installment loans, you can borrow them from online lenders. The application for online installment loans is usually conducted through the Internet. If you want to try this loan option, you can visit AimFinance for installment loans.
Pros of Borrowing Online Installment Loans
Consumers of online installment loans have their reasons for preferring this loan option. Take note of these benefits from borrowing an online installment loan.
Straightforward Application Process
The fact that you are applying to borrow money via the Internet is the most sought-after feature of an online installment loan. It will only take minutes to fill out your loan application form online, and you can do it in the comfort of your home, as long as you have an internet connection.
Fast Transfer of Needed Funds
After going through the simple application process and the lender gives his approval to your application, the funds that you need will be transferred into your account right away. If you comply with the requirements, you will get your cash within the day after your successful application.
No Stringent Credit Check
Another feature that people love about online installment loans is their less stringent credit check. Borrowers with not-so-good credit scores may still get approval from online lenders who offer this loan option. This feature is one of the reasons why online installment loans are preferred by consumers nowadays.
Higher Borrowing Limit
Online lenders may provide you with a higher loan amount if you satisfy the requirements for an online installment loan. For instance, if the lender sees you have the means to pay back the money you borrow, you may take out a higher loan amount to cover an important purchase.
Favorable Repayment Terms
The repayment term of an online installment loan is typically favorable to the borrower. The fact that you can make your payments through installments over a prescribed period gives you some leeway to budget your loan payments. The fixed monthly repayment means you know exactly how much you must pay every month.
Cons of Getting Online Installment Loans
Online installment loans also have downsides that borrowers should know before they think of getting one. Now, please take note of these disadvantages.
Higher Interest Rates
There are online installment loans designed for borrowers with bad credit. In this case, expect to pay a higher interest rate on the loan. You also have to be aware of online lenders who impose exorbitant interest rates, as they can lead to your debt problems.
Fees and Penalties
Beware of fees and penalties associated with online installment loans. Typically, there is an origination fee, prepayment penalty, and late payment penalty that may add to the overall cost of the loan. Make sure to ask the online lender with regard to these ancillary fees to help you make an informed decision before submitting your loan application.
Disallowance to Add to the Loan Amount Once It is Approved
Many online lenders will not allow you to increase the loan amount you borrow once you get approval for the same loan. If you think you want to borrow more money, you have to request another loan to cover whatever expenses you have. To avoid this situation, you should know exactly the amount you need to borrow before making your first loan application.
Final Thoughts
Online installment loans can be a favorable option to help you pay for your necessary or emergency expenses. Today, an online installment loan is one of the most preferred financing options by borrowers because of the advantages associated with it.
This loan option has a less stringent credit assessment, favorable repayment terms, a higher borrowing limit, a simple application process, and quick fund transfer. However, there are also downsides to borrowing an online installment loan, such as higher interest rates, additional fees and penalties, and the disallowance to increase an approved loan amount.