Installment loans are popular because borrowers can easily avail of the loan amount once and repay it in monthly installments. The flexibility offered by installment loans for bad credit is a major reason why people move toward this loan.
Similar to the other loan or credits, you can use your installment loan to make a large purchase while managing your finance. You can borrow the installment loan bad credit up to $100,000.
The annual percentage rate ( APR ) of installment loans for bad credit ranges from 6% to 36%. The best thing about the installment loan is that you have to repay the loan within 2-7 years.
Some installment loan examples
There are different type of loan that shares the installment structure. It means there is a loan other than an installment loan that is also available that allows the borrower to repay the loan in installments. Here are some examples of instalment loans for bad credit
- Auto loans have come under the category of secured loans. This loan has come with fixed rates. Remember that once you take the auto loan, you must repay the loan amount in regular installments.
- Personal loans are considered unsecured loans. It has also come with fixed rates. The different thing is that you have a choice while taking the loan. You want to repay the loan biweekly or in monthly payments.
- Federal student loans are also an example of installment loans that come with fixed rates. This loan needs to be repaid in equal installments.
When the installment loan is a good idea, even if you have bad credit
Here are the main purposes of taking an installment loan for bad credit
- Debt consolidation
An installment loan can work with unsecured debts, including credit card and high-interest loans, with revolving credit, into fixed single monthly payments.
Keep in mind that a debt consolidation loan is also a good idea if the new rate of interest is less than the combined rates possessed on your debts.
- Home repairs
There are many loans available for home improvement purposes. But if you know how much money you require and have bad credit, then an installment loan is the best option to pay for the home improvements.
As they are expensive, for some people, an installment loan may not be considered a priority in emergencies. But if you know that you can easily make the payments or need fast cash, then an installment loan works better than an emergency loan.