The best online installment loans offer speed, convenience, and flexibility. However, you might be surprised to discover that mainstream lenders aren’t necessarily the best place to look for one.
Why? Traditional lenders tend to use traditional processes. They’re set in their ways, expect you to come to them, and their qualification requirements are very rigid. Luckily, you have a better option. – online installment loans.
This guide will provide you with information on how online installment loans work. It will also look at the features that separate the best online installment loans from the less desirable.
Finally, this guide will describe some of the characteristics you should look for in a good lender. After all, the more information you have the more likely you’ll make a good financial decision.
Features of the Best Online Installment Loans
Online installment loans are unlike other forms of credit. They work in a different way and offer many benefits you may not have considered.
Online Preferrable to In-Person
Certainly, you can get an installment loan through a brick-and-mortar lender. However, that means you have to take time out of your busy day to visit them. You may even need to visit them more than once if they need additional documents such as proof of income.
Borrowing in-person isn’t any safer either. A good online lender uses top-level data encryption that rivals or surpasses that offered by traditional lenders.
Borrow From $200 to $2,000
Most lenders don’t bother with small loans. Instead, they expect you to use a credit card or a payday loan. However, those options will cost you more than an installment loan. Plus, the maximum allowable payday loan amount in most states is only $500.
Luckily, a good lender offers installment loans of between $200 and $2,000. There’s no reason to resort to a payday loan or credit card, when you have a superior financial option.
Simple, Not Compound Interest
Credit cards charge interest based on an annual percentage rate (APR). If you pay what you owe during the grace period (usually 28-days), you’re fine.
However, when you carry a balance, interest starts to accumulate on the balance. Then you pay interest on your outstanding balance and interest on the interest. Consequently, your debt can grow very quickly. Credit card interest rates can also increase which automatically increases the interest you pay.
Alternatively, the best online installment loans charge simple interest. The lender sets your interest rate when they approve your loan and it never changes. Each payment you make pays a portion towards interest and a portion towards your outstanding balance. Interest does not accumulate on your unpaid balance. This can save you hundreds or thousands of dollars.
Fixed Loan End Date
The best online installment loans differ from a credit card in another way. You pay regular payments and know precisely when you’ll pay off your debt. This feature also makes it easier to budget.
Additionally, you can’t add to the balance like you can with a credit card. There’s no fear of getting in over your head, since you must pay off your loan before you can borrow again.
Better Features Than Payday Loans
The best online installments loans also offer more time to repay than a payday loan. You may have as long as a year, whereas payday loans are usually repaid within 14 and 31 days, depending on your state. The longer repayment term makes it much easier to manage your finances.
Additionally, the best installment loans usually have far lower interest rates, which saves you money.
Flexibility
A best online installment loans offer flexibility. If you’re facing an urgent need, a good lender may offer you a loan if you can show you have the means to repay.
Consequently, you can borrow to buy a used car, replace a refrigerator, fly to visit a sick family member, or pay for a dental treatment.
Features of the Best Lenders
Each lender determines their own criteria for creditworthiness. However, the best lenders are transparent, fully-automated, and fair. Here are some of the most important factors to look for in the best lenders.
Emphasis on Income
A good lender places emphasis on your income and your ability to repay, not just your credit. They should consider many factors, not just your credit score.
Regrettably, that’s not always the case with many lenders. They may set a minimum credit score requirement which could automatically eliminate you based on a number generated by the credit reporting agencies.
However, the best lenders do not have a minimum credit score. If you earn a steady recurring income and are paid by direct deposit, you have a decent chance of qualifying.
No Fees or Penalties
This is a very important consideration, because unnecessary fees and penalties will cost you more.
For instance, some lenders make it seem it is a normal practice to pay an origination fee. Basically, that’s a charge for setting up your account with the lender. This fee can be costly too as it can range between 0.5 – 8% of your total loan amount.
Another cost that drives up how much you pay when you borrow is a pre-payment penalty. This penalty is meant to compensate the lender for the interest they lose if you decide you want to pay more on your loan.
Fortunately, a good lender does not charge either of these fees. They welcome additional payments at any time and setting up your account is an administrative expense they absorb.
No Co-Signer
If you’re struggling to restore your credit or you have little or no credit history, you may not be able to borrow without a co-signer. Luckily, that’s not necessarily the case when you choose a good lender.
As mentioned, a good lender considers many factors, but focuses primarily on your income. As a result, if you can demonstrate at least two-months of income and banking stability, you may qualify without a co-signer.
Extremely Fast Process
We already mentioned that applying online is more convenient. However, it is also incredibly fast when you choose the right lender.
A good lender offers a simple application form that you can complete in less than 15-minutes. Since you don’t need to upload proof of income, it makes the process even faster.
However, the magic really happens when you submit your application to a good online lender. Their fully-automated system generates a decision within minutes. There’s no waiting around and you will see your loan terms immediately, if you’re pre-approved.
Plus, the pre-approval process does not affect your credit score, whether you decide to borrow or not. If you do want the loan, all you need to do is accept the terms and the lender will prepare your loan contract. You sign this digitally, which triggers the funds release process.
A good lender could have money in your bank account within 24 hours, if you apply during business hours. Otherwise, you usually have your funds the next business day.
Transparent Requirements
There’s nothing worse than wasting time on an application for a loan that you can’t possibly get. That’s why a good lender provides their basic qualification requirements.
These requirements should be straightforward and simple too. Otherwise, you’re not getting one of the best online installment loans. On the flip side, a good lender doesn’t promise a near 100% approval rate, since that isn’t possible. They should also tell you when they can’t possibly approve you.
Multiple Customer Service Options
Don’t choose an online lender that only offers email support. Even though you may never use it, you will definitely want to able to talk to an actual person. Consequently, a 1-800 number for immediate assistance is vital.
Of course, the more options the better. Email is standard, but check to see if they also provide website support and an in-depth FAQ page. This may indicate the lender is more invested in their customers.
FlexMoney Offers the Best Online Installment Loans
This may seem a bold claim, but we’re willing to back it up. For instance, here are our basic qualification requirements as well as when we can’t help:
- Name
- Address
- Valid and Active Email
- Phone Number
- Valid Social Security Number or Individual Taxpayer Identification Number
- Proof of a steady source of recurring income (we consider employment, self-employment, disability, and pension income)
- Proof of active account with an American financial institution with at least two-months of transactions
Sorry, we can’t help you if you are currently enrolled in an active bankruptcy, consumer proposal, or credit counselling program.
Additional Reasons to Choose FlexMoney
Here’s a quick summary of what we offer and why we’re your best choice when compared to other lenders:
- 100% online – no office visits
- Simple application form
- Pre-approval process – no impact on credit score
- No waiting – get a decision in minutes
- Loans of between $200 and $2,000
- 12-months to repay
- Simple, not compound interest
- Fixed interest rate and regular payments
- No unnecessary fees
- Fast funds release
- Excellent customer service
Visit our website for more information or to start the application process now. We also offer more information on why installment loans are your best financial choice here.
FlexMoney offers some of the best online installment loans in the industry. Discover why our customers rate us so highly.