Now that the Internet is used in our daily lives, it can be used to find loans from all kinds of providers. The details and terms of each loan will vary wildly depending on where you are in the world and who is providing it, but there are generalities that we can cover here.
Applying for a loan online can be a confusing process, especially if you’re not familiar with the world of finance or the Internet, or neither. If you want to apply for an installment loan through the Internet, we have everything you need to know right here.
How To Be Eligible For Installment Loans
The eligibility requirements for an installment loan are not standardized. This means that no one standard applies to different loan providers, so you’ll need to consult the lender to find out the eligibility criteria. Fortunately for you, their website should contain all of the information you need to find out if you’re eligible.
While the individual details will vary, lenders typically look at these four factors:
- How much the borrower wants to borrow.
- How much the borrower makes and spends.
- How long the loan is going to last before being fully repaid.
- The borrower’s credit score.
Can You Get An Installment Loan With Bad Credit?
Having a good credit score is the most important factor when being considered for a loan. This means that those with bad credit are barred from getting many of them, but it isn’t the end. People with bad credit need financial assistance sometimes, too.
Many trustworthy lenders extend an olive branch to those with bad credit, so they can get a loan despite their bad credit. If you have bad credit but want to get an installment loan, you should make sure you have an income and a bank account at the very least to receive a loan from bad credit lenders.
Note that installment loans are better for short-term borrowing because they tend to be more expensive than other options, especially if they’re coming from a direct lender. Hunt for the lowest rate available to get the most favorable deal for you.
The Application Process
If you don’t apply for a loan properly, you’re going to lose out on valuable opportunities where you may have been accepted. You don’t want to miss out on a loan because you messed up the application process, so here’s a guide on what to do and what not to do.
Follow these steps:
- First, make sure you can pay your loan on time before you even start. Loans aren’t a solution for poor financial situations.
- Compare lenders to find the loan offer that is the best for you.
- Check the lender’s eligibility criteria before you start.
- When possible, choose a short-term loan option over a long-term one.
- Make sure the repayment period is near your payday, so you always have the funds in your account.
While you can do everything right, doing something wrong can also sabotage the loan application process. As we said, you should avoid applying for loans if you know or suspect that you can’t make repayments for the loan. You can’t miss any repayments without your credit score suffering, so take stock of your finances and make sure you can make every repayment until the loan has run its course.
It may be tempting to apply for several loans at once to increase your chances of being accepted. That won’t work. When you apply for a loan, the lender will conduct a credit check to see what’s going on with your finances. That check is typically visible in future credit checks, listed as “hard searches.”
You may be able to tell where this is going. If a lender asks for a credit check and then sees that you’ve made multiple loan applications at the same time, each hard search will lower your credit score. A lower rating impacts your ability to get any loan or finance other assets.
The lenders won’t see if the other applications were accepted or not either, so the situation becomes more complicated. It looks like you’re desperately searching for money in a very short span of time, indicating that your finances aren’t in order, which is very unattractive for lenders. It places doubt on your ability to repay the loan, so they won’t want to award you the funds.
The more loans you’ve tried to apply for, the more desperate you’ll look! Remember that hard searches stick around for approximately two years in credit checks.
That’s why one good application is better than several rushed applications to every lender you can find online. Follow the steps outlined above and your application should be successful with the right lenders.
