7 Important Things to Know About Personal Loans

Thinking about personal loans can be a stressful situation. Often times, we approach it as though it is a bad thing. It is almost like “here I go again, I need something I cannot afford”. While there are times when that is true, it does not always have to be bad. A personal loan can be a good thing for you and your financial picture. The key is that you must use it properly and for the right things. I am going to help you understand the good and bad ways to use a loan. Personal loans are not something you should fear, but there are some important things to know about personal loans. Keep reading as I dive a little deeper into the top 7 things you should know about personal loans.

What Is A Personal Loan?

Before we can talk about all the things to know about personal loans, it is important that you fully understand a personal loan. A personal loan in its most basic definition is a fixed amount of money that someone lets you borrow. You promise to repay that amount of money plus a little extra every month until the loan is paid. Seems fairly simple, right? Well, there are some details that I brushed past that are important for you to understand. That someone letting you borrow money is a lender and it is typically some type of financial institution. Personal loans go by many names. You may hear it referred to as consumer installment loans or an unsecured loan. These are all still personal loans.

I mentioned plus a little something extra. That is called interest. The amount of interest you pay changes based on the lender and on your credit. We will come back to credit in a bit. The amount you pay back each month remains the same and you pay it back for anywhere between three to five years. This is all determined before you sign the loan contract. There is often a bunch of fine print. Be sure you read all of that.

Are There Different Kinds Of Personal Loans?

I mentioned earlier that a personal loan goes by many different names. There are also many uses for personal loans and some different types of loans. These are also things to know about personal loans when deciding what to do. You can use a personal loan for just about anything you want. A lender asks you the purpose of the loan, but that really is not a factor in your approval.

Personal loans are often used to consolidate debt or to pay off major medical expenses. When you find yourself in an emergency situation and you are short on cash, a personal loan may be the answer for you. It is important to remember that a personal loan is not the long term answer. You have to pay back the loan each month, so it is important to make sure you can afford to pay it back. Today it is much easier to apply for a loan. You can even get personal loan online in a matter of days. There are loans such as payday loans and cash loans bad credit

The Thought Of A Personal Loan Scares Me

That is completely understandable. Obtaining a personal loan and adding more debt to your life can be a scary thought. The key is to know everything you can about personal loans. When you truly understand the personal loan process, the thought of it is less scary. Understanding all the things to know about personal loans helps you make an informed decision instead of an emotional one.

Remember that a personal loan can help you improve your financial picture when used properly. If your credit is not that great, it can help you improve your credit score when you make your payments timely. A personal loan can help you consolidate your debt so you can focus on one payment instead of multiple smaller payments. This can help you decrease your total amount of debt faster because you can focus on just one debt. It also helps you mentally by focusing on just one bill to pay instead of attempting to pay many different bills.

Important Things to Know About Personal Loans

If you decide to take out a personal loan, you should definitely explore the entire process to get to know the benefits and the disadvantages. But there are some key things we decided to point out, so you’d know what to pay special attention to.

Important Thing To Know About A Loan #1 – Credit

I know this is a topic that few people ever want to discuss. Even the mention of the word credit concerns people. Credit is definitely an area where the more you know, the better you are. This is one of the top things to know about personal loans. I am going to start with basics when it comes to credit.

Your credit score is a three-digit number that appears on your credit report. There is a difference between your credit score and your credit report. Your credit score is on your credit report. Your credit report shows your credit history. It lists all your debts and it shows your payment history, the good and the bad. Items tend to stay on your credit report for 7 to 10 years. It takes a long time to build your credit, but just a few missed or late payments send it plummeting.

A typical credit score ranges from 350 to 850. Most people have a credit score somewhere between 600 to 750. Good credit falls somewhere between 670 to 800. Anything below 570 falls into the danger zone of bad credit. When you have bad credit, it is much harder to get a good interest rate. You may find it is difficult to be approved for a loan, if you have bad credit. It is still possible to get a loan, but you have to work harder and do more research.

What Do I Do If I Have Bad Credit?

One of the important things to know about personal loans is that your credit is the reason personal loans are commonly denied. You should pull your credit report and look at your credit score once a year. This helps you remain in control of it. You can also check it for errors, so you can address them. If there is an error on your credit report, you must take steps to correct it. If you do not know your credit score, you cannot do anything to improve it. You can reduce the amount of debt that you have.

Lenders look at something called a debt to income ratio. This is the amount of debt that you have compared to the amount of income you have. You need to lower your debt to help improve your credit score. Another thing you need to do is begin to create a positive credit history. You can do this by making sure that you pay all of your bills on time and for the correct amount. Late and missed payments are the leading cause for a poor credit score.

Another factor that hurts your credit score is your income and job history. If you have low income, you should work hard to improve that, or find an additional job until you can improve your credit score. Lenders look at the amount of time you have been working for the same employer as part of your credit history. When you have one employer for a long time that shows them you are stable. When you bounce from job to job in short periods of time, or have periods of no employment, that makes then think you are not stable. This makes them think that you are not a good candidate to pay back a loan.

How to Improve Your Credit Score Without Crying

 Important Thing To Know About A Loan #2 – Income

Since we are talking about employment history, let us talk a little deeper about income. You may not realize just how much that impacts your ability to obtain a loan. Add this to the list of things to know about personal loans. Not only does a lender want you to have stable employment and a good income, but they also want you to prove it to them. Lenders require you to show proof of income for personal loans  if they think they might consider approving you for a loan. The most obvious proof of income is a pay stub, but not everyone has typical employment. There are many people who are self-employed or do contract work or possibly even receive payment in cash. They still need to show proof of employment.

Other ways to show proof of employment are a W2. This is a tax document that shows how much money you have made in the previous year. This, however, may not show the income that you received in cash. You can use a tax return as proof of income. This document shows all of the income that you claim, along with any losses that you claim. You must remember that this document shows only the income you claim. You have made income and you are not reporting it as such, it does not show up on your tax documents. Doing so may also cause you problems later with the Internal Revenue Service (IRS), so I would not recommend you do that.

Lenders may also accept bank statements as proof of how much money is going in and coming out of your bank account. It shows your deposits which could be income. Again, this document only shows money that is deposited into your account. If you have cash or money is being deposited elsewhere, it will not show up on that bank statement.

Important Thing To Know About A Loan #3 – Interest Rates and Fees

Interest rates are an annoying thing that always accompanies a loan you get from a lender. Rates and fees are absolutely things to know about personal loans. They can make a big difference in the amount of money you are paying back each month. I am going to list for you some of the common fees and terms you should look for when it comes to personal loans.

  • Principal amount – this is the actual amount of money you borrow. The lender adds interest on to this amount. Typically, lenders have a maximum amount they lend for a personal loan.
  • Interest rate – this is a percentage of your loan. This is added on top of your principal amount you borrow. They are usually a fixed rate. They can be anywhere from 7 percent to 30 percent depending on your credit.
  • Term length – this is the amount of time you are paying back the loan. They are usually fixed, so unlike credit cards, you pay the same amount each month.
  • Prepayment penalties – this is the amount some lenders charge if you pay back the loan before the end of the term. Remember the lender makes money based on the amount of interest they charge. When you pay off the loan sooner, ultimately you are paying less interest and the lender is making less money. They do not often like that. Be sure to read the fine print to determine if there are any early repayment fees.
  • Additional fees – always read the fine to understand any fees you may pay.  A lender must disclose all fees and penalties in the contract before you sign it. It is, however, up to you to read it. Be sure to look for any origination fees, application fees or service charges.

Important Thing To Know About A Loan #4 – Documents

Lenders require many documents in addition to the proof of income we talked about earlier in this article. These are things to know about personal loans before you apply for a loan. If you understand what documents you may need to provide, you can work to get them together and have them ready. This may shorten the length of time for your waiting period while the lender makes a decision on your loan.

Lenders require documentation such as proof of identity. It is important that the lender knows you are who you are claiming to be. With all the identity theft out there today, they cannot be too careful. This is put in place to protect you and the bank. You often must provide a drivers license or some other form of picture ID. That could be a passport, military ID, or state ID. Please make sure that this identification card is not expired. They do not accept expired documents. The lender may also ask to see your Social Security card. This tends to be an optional document only if they need other supporting documentation to verify your identity.

You want to make this process as easy as possible for the lender. Remember, you are asking them if you can borrow money from them. You should provide them any documentation they need. These documents are in addition to the ones we discussed earlier, such as paystubs, tax returns and bank statements.

Important Thing To Know About A Loan #5 – Defaulting On A Loan

Let us talk about defaulting on a loan for a minute. I do not want to spend much time on this because it is something you should avoid at all costs. However, being in default is one of those things to know about personal loans. Basically, when you default on a loan it means that you are not paying the loan. Lenders differ in their definition of default. Some lenders say it is one missed payment. Other lenders give you a grace period of several months before they say you are in default.

No matter what your lender considers default, you want to avoid it. You should also know that a lender will get its money. It does not matter what that lender has to do. They may turn you over to a collections company. Or, they may sue you. They may take you to court and have your wages garnished, but they get their money.

You should focus on always paying your bills on time. If you are not able to pay your bills, then you should be honest with the lender. Call them and let them know you are having difficulty paying the bill. Most of the time a lender is wiling to work with you. It does not benefit them when you do not pay your bills. If they can set up a different payment plan with you, they will make every effort to do so.

Important Thing To Know About A Loan #6 – Pre-Qualified

Pre-approval and pre-qualified are confusing terms that lenders like to throw around a lot. They are things to know about personal loans, so I want to talk about it a little bit. You probably have received those invitations in the mail from lenders stating that you have been pre-qualified and pre-approved. When a lender says you are pre-qualified, it means they have done a soft hit to your credit. That means that lender has looked at your information, but hasn’t done anything that would impact your credit score. The lender took a quick look at your information and believes that you may qualify for a loan with them. However, this does not guarantee your approval. You can still be denied when you apply for the loan and the lender pulls your full credit report.

A hard pull of your credit report requires your approval because it is a hit to your credit report. The lender is able to see everything on your credit report. At times, you may receive a pre-approval from a mortgage company. This is important when you are trying to buy a home. These often are more of a guarantee of approval. For a personal loan, you do not often get those guarantees.

Important Thing To Know About A Loan #7 – Loans For Bad Credit

Earlier in this post I talked about credit and mentioned that if you have bad credit, you have to work a little harder to get a loan. That is still true. Bad credit does not stop you from getting a loan, but it makes it harder. It is one of those things to know about personal loans. Do your homework and it can save you a lot of money in interest and fees. You know that your interest rate is based primarily on your credit score. Also, you know that you can improve your credit score, but it takes times and consistent effort. You do not have time because you need the loan know.

In these cases, you should look for lenders other than a typical bank. Credit unions often cater to those with less than perfect credit and their interest rates tend to remain reasonable. You can apply for a loan with an online lender. The application turn around time is just a few days. It is fast, but often comes with a higher interest rate. Be cautious not to get sucked into fast cash loans bad credit that you cannot afford. It may be tempting but remember you always have to pay it back per the terms of the agreement. If you are not able to do that, walk away from that loan and find another one that fits for you.

We Can’t Forget Budgeting

Since we are talking about a loan that fits for you, it makes perfect sense to talk about budget. You probably thought you would get through this article without having to talk about a budget, didn’t you? Guess what? It is not going to happen. Creating a budget is important and if you do not have one, you need one. If you have one, you need to follow it. This is one of those important things to know about personal loans.

A budget helps you determine how much of a loan you can afford to pay back. You should start by simply writing down all your expenses in one column and all of your income in another. Add up the expenses and if it is more than your income, you cannot afford to pay back a loan. Not only that, but you should begin to decrease some of those expenses. Maybe you can do that with a consolidation loan, depending on the expenses. Maybe you can remove some of the things you are paying for each month.

For example, do you buy lunch everyday? Maybe you can take your lunch instead of buying it and see how much money that saves you per month. I am willing to bet that small change could save you almost $300. You can make simple changes that make a huge impact on the amount of money you have each month. You may determine that by cutting some costs, you do not even need a loan. But, you cannot do these things until you actually sit down and begin to look at how much money you are spending each month.

Do not look at it as a bad thing. Think about it as you taking control of your money and your life. This is an opportunity for you to be in control instead of your money controlling you. It is a powerful place to be and it feels really good. One of those things to know about personal loans is that you always have to pay it back. It is not free money.


In all this talk about the things to know about personal loans, I did not talk much about your ability to afford the loan. It is incredibly important that you make sure you can afford to pay back the loan before you apply for it. You should not enter into a loan contract lightly. You should take the time to consider if this is the right decision for you. If it is and you can pay it back, go for it. However, if you know you cannot afford to pay back the loan, you should stop here.

In all the things to know about personal loans, it is key to remember that you have to make a monthly payment until the loan is paid. Most often, that first payment is within 30 days of you receiving the money. There is not a grace period. The lender want their money to come back to them quickly. You do not want to negatively impact your credit because you took out a loan that you already know you cannot afford to repay. You should look into other options if a loan is not the right one for you.


Pros and Cons for Personal Loans with Bad Credit

Pros and Cons for Personal Loans with Bad Credit

Those needing money and needing it fast often grab at any opportunity bad credit lenders throw at them. These people operate from their need instead of from a logical, informed place. They need to know the pros and cons of bad credit personal installment loans before they type in the first letter on an online application or pick up the phone. What are these personal loan pros and cons?

You’ll want to keep reading before you act…

Advantages and Disadvantages of Personal Loans with Bad Credit

Before you take out a loan, you need to know how it’s going to affect your financial situation. This is exactly what we’re going to do in this article – list all the pros and cons of taking out a personal loan if you’re a bad credit borrower.

Personal Loans with Bad Credit – PROS 

They’re Personal

If you were to take out a car loan but didn’t buy a car, you could be facing fraud charges. The same situation would be much more serious if you borrowed money to buy a house but didn’t. Since you don’t want charges of fraud and misuse of funds, a car or a house should be bought. It’s not the same with taking out a personal loan with bad credit. There are as many reasons under the sun to use a personal loans with bad credit as there are bad credit loan lenders ready to provide you their offer.

Loan Consolidation

Lots of people use cash loans with bad credit to consolidate credit card, student loans, and installment loan debt. The result is one low payment with lower interest rates than the loans themselves. Bankrate tells us that the last month for which there were records was February 2019. The Federal Reserve stated that the median rate on 24 month personal loans with bad credit was ten percent as opposed to the general credit card rate of 15.

No Collateral To Risk

While the house is security for a mortgage loan and the car for an auto loan, the personal loans with bad credit is only secured by the knowledge that you have a good job, even if your credit could use some help. Bad credit short term loan lenders are taking a chance you’ll repay the loan. Time on the job and few debts are good signs you’ll repay the loan. You won’t be risking your car, house, collections, or anything else.

Time To Repay The Loan

If you’re strapped for cash, having a difficult time paying bills, or suddenly need an influx of cash to pay for something unexpected, then repaying any loan could be difficult. With bad credit personal loans, you have between one or two years and five years to repay the loan. One low monthly payment is fixed for this period of time.

Credit Profile Will Improve

Credit bureaus like to see people with varying credit accounts. Repaying loans on time and in full means you’re a good credit risk. Personal loans with bad credit show the credit bureaus that you’re working on improving your credit. Okay, so you won’t be able to borrow as much as if you had had good credit, but each loan you pay off on time will inch your credit score up a bit.

That’s a good thing. As your credit improves, you’ll be able to borrow more and at better interest rates. Keep paying them off on time, and you’ll soon have A-list credit (a score of over 750.)

Establish An Emergency Fund

My parents always told me to put away ten dollars out of each paycheck for an emergency. I’ve always lived paycheck to paycheck like most Americans, so I was never able to save anything. That’s the story of nine out of ten people, unfortunately. However, personal loans with bad credit can help you establish an emergency fund with which to meet anything life can and does throw at you.

They’re Quick

In most cases, bad credit short term loan lenders can give give you a loan within hours. Sometimes it takes until the next day after application to receive the funds. This is a giant step above bank loans which can take days up to a couple weeks.

Not As Many Documents

Most loans require your banking records, proof of all your debts, paycheck stubs, the deed to your house, and your first born. Okay, I’m kidding, but with a bank or other personal loans with bad credit lenders, you have to provide a mighty lot of information.. You’ll only need a picture ID, paycheck stubs (at least four, six to eight is better,) and your bank account number. That’s it. Short and sweet, and you’ll have your money within hours.

There’s Perks

Lenders offering cash loans bad credit have some stiff competition. They’ll offer you all kinds of perks in order to get your business such as unemployment protection. This would pay off your loan if you lost your job. Some lenders even offer counseling to help you get another job.

Tax Benefits

If you use personal loans with bad credit to upgrade your home or help towards buying a new one, you can get credit or a deduction for the interest on the loan come tax season. Be aware that you’ll need tons of documentation that you actually spent the money for this purpose. After all, it’s the IRS with which you’ll be dealing.

Available Anytime

When an emergency occurs, it usually happens in the middle of the night, on the weekends, on vacations, on holidays, or when you aren’t home. Personal loans with bad credit can be applied for online anytime of the day or night anywhere in the world you happen to be at the time. All you need do is fill out the application, upload your documents, and wait for acceptance.

Hidden Charges

We’ve all done it. We’ve gotten into something in which we were told that the price would be this, but six months down the road (when you’ve forgotten all about it) suddenly you’re paying extra. Those hidden charges are how most companies make some of their money, and they always hike up the interest rate. This is of benefit to the company, not to you.

Bad credit personal installment loans may not have hidden charges. You’re told the interest rate and payment amount up front. They’re both fixed. You won’t pay another penny. That’s of benefit to you, and one you won’t find elsewhere.

No Penalties

With any other lender or creditor, you may pay a penalty for paying off your loan early. Additionally, variable rates and payments loans means you never know what you’ll be repaying from month to month. Bad credit lenders don’t always operate that way. Personal loans with bad credit lenders give you fixed rates and payments. Paying it off early with no penalties attached to you is another perk, and a great one, at that.

Personal Loans with Bad Credit – Cons

There are some great advantages to taking out loans with bad credit. However, everything in creation has two sides. If it has an advantage, then it also has a disadvantage. Those considering checking with these types of lenders for one of their bad credit personal installment loans should consult the other side of the coin. They might or might not be able to handle the downsides of personal loans.

Debt Consolidation

If you’re using a personal loans with bad credit to pay off credit card debt, you could be getting in over your head. By that, we mean that you’re only morphing from one payment type to another. You’re trading monthly credit card payments with ever-changing interest rates to one payment with a fixed interest rate. That leaves your credit cards free and clear to be used again. Consider freezing your credit cards (literally, it doesn’t hurt them) until the cash loans bad credit are paid off.

Higher Interest Rates

Bad credit, however, gets you higher interest rates. Loan Shop around for the best rates on personal loans with bad credit.

Smaller Loan Amount

As your credit score improves, you’ll be able to borrow more money at better interest rates. For now, though, bad credit lenders can’t give you the same loan as you would have gotten had your credit been better.

Defaulting On The Loan

If you default on a car loan or a mortgage loan, they come and take away your car or your house. In the case of bad credit loans, if you default on the loan, the bad credit short term loan lenders take you to court. A lien will be placed on any assets you possess, it goes on your credit report, and you will be liable for the court costs and attorney fees as well.

Origination Fees

Not all lenders do this, but some bad credit lenders charge origination fees. This is a one to six percent fee to cover the costs of processing the loan. It’s paid up front instead of paying it back with the monthly payments. If your credit isn’t good, expect to pay a higher fee than if your credit had been good. Shop around for lenders who don’t charge this fee.

No Partial Payments

Some lenders allow you to pay money down on the principle, since most payments go toward repaying interest on the loan. Bad credit lenders aren’t of a mind to accept partial payments. You have to pay back the stipulated amount on the stipulated date for however long the loan is financed.

Monthly Payments

If you’re used to paying small amounts on credit cards each month, then a hefty monthly payment schedule might be too much for your finances to manage. Repayment of personal loans with bad credit can run into the hundreds, depending for how much the bad credit loan amount was. If your budget can’t handle that, reconsider bad credit loans.


Banks and credit unions are different from other personal loans offices. One thing they both need, though, is qualifying for the loan. Personal loans with bad credit might require more information and documentation. In addition to a picture ID, paycheck stubs, and bank information, be prepared to upload or bring with you whatever information the loan office needs such as information on assets.

Debt To Income Ratio

Taking out personal loans with bad credit increases your income to debt ratio. With bad credit to start with, this can go two ways. Paying it back on time and in full will improve your credit score. However, if your credit score isn’t what it should be due to too much debt, you might not get the loan in the first place. If you do get the loan, pay it off in order to decrease your income to debt ratio.

Credit Hits

Each time you apply for a loan or for credit at a store, the loan officer or store manager checks your credit reports. Each hit on your credit report lowers your credit score. This will make it difficult for personal loans with bad credit lenders to give you a loan.

Begins A Bad Habit

Bad credit personal loans are meant to get you out of a bind, purchase something necessary, deal with medical problems, you get the picture. The problem is that it’s not too difficult to get one. When it’s paid off, it’s too simple to get another, whether you truly need it or not. Just like using your credit cards right after you get a bad credit personal loan to pay them all off, beware getting another personal loan just because you can.

Bank Account

Monthly fees, per check fees, and other sometimes hidden fees keep many people from using bank accounts. Why bother with plastic when it’s so easily boosted from your wallet or your pocket? Why bother with long lines, tired tellers, and traffic getting to the branch office? It costs less than a dollar to get a post office money order with which to pay bills and 45 cents for a stamp. Cash is king, dude.

The trouble is that personal loan offices need a bank account into which to put your personal loan money. When you deal with finance, you deal with transfers, ones and zeroes. Not having a bank account means to a loan officer that there’s nowhere to transfer those ones and zeroes. This messes up finance people’s heads, and you won’t get the loan.


Bad credit personal loan seekers often get pitched at the closing of the loan. For instance, the loan officer might try to get you to buy life insurance. He’ll tell you that for the price of a cup of coffee every day, you could protect your family from loss if you die. Life insurance is an important thing, and you don’t want some random loan officer selling you a policy. It almost always doesn’t cover much in the event of your death, added to the fact that it’s almost always more expensive than it’s worth. Skip the pitches.

Risk Of Scams

The more our lives are led online, the more scammers and hackers have chances to steal our information. Identity theft and loan fraud are two of the most prevalent types of online scams. These scammers will do and say anything to get your personal and banking information. If you’re looking for bad credit personal loans online, there are a few things you can look for in order to protect yourself:

No Credit Check

The only way a personal loan officer can judge whether or not you’ll repay the loan is by examining your credit and work history. Legitimate online loan companies will do two credit checks: a “soft” credit check to see in what state your credit is. The second will come following your agreement to rates and terms. This credit check is more detailed, and tells the loan officer just what rates to charge. Avoid anyone who advertises loans with no credit check.

Up Front Fees

The only fee a legitimate loan officer will ask of you is the origination fee. It’s paid the instant you get your money, and no more will be asked of you. Scam loan “officers” will ask you to give them your debit card as a sort of security for the loan. They’ll tell you they won’t touch the card, but have it on record. In reality, the instant your back is turned, they clean off the card and disappear. Avoid anyone asking for up front fees.

Sure Signs Of A Scam

  • If it has to do with money, it has to be registered with a state. Call your state’s Attorney General to see if the online lender you’re considering is registered.
  • If an email appears out of nowhere with an address saying it’s from, let’s say Amazon, make sure “amazon.com” appears at the end of the email address. If not, it’s a scam.
  • Legitimate lenders have a legitimate address, either a brick and mortar address or an online address. Online lenders have company or corporate offices located somewhere. The address will show up on Google maps.
  • Check the spelling and grammar. If you’re not well versed in correct usage and grammar, then use a free checker like Grammarly. Lots of scam artists are located outside the U. S. English isn’t their first language. When you see misspelled words, improper English usage, and other grammar mistakes, nine times out of ten it’s a scam.

Interest paid based on credit

Let’s review some real examples of why you might take our a Personal Loan even with Bad Credit

These are just a few scenarios involving people with a serious need for money, but no idea where to go for it. They have bad or no credit which means most lenders won’t give them personal loans with bad credit. www.creditry.com Many people in these and even worse situations turn to payday loans, credit card advances, or cash loans bad credit.

Abby’s house was too small. Abby, her husband, and her two toddlers bumped into each other no matter where they were in the house. She had a choice: she could add on to the house, or she could buy a new one. She had only been on her job for a year, though. Her husband was self-employed. They made enough money to get by, but not enough to qualify for a mortgage.

Brian had been hospitalized for an abdominal problem. He lived in great pain. The doctors told him an operation would get rid of the problem. The snag to that was that he’d be out of work for six months. There would be no telling if his job would still be there when he returned to work. His wife could pay the bills, but the job thing was a serious setback.

Let’s take a Few more to Drive the point home

Janet was going through a hostile, messy divorce. She got the house in the settlement, but she could seriously use another bedroom. The kitchen was so small she met herself coming in the door. Janet needed to renovate the house, but from where would the money come?

Will was so nice that he couldn’t turn anyone away when they asked to borrow money. Sometimes he was into negative numbers when someone asked. His wife needed expensive special medicine to right a medical wrong. He’d no idea where he’d get the money, and she needed it right now.

Karen’s car had died on July 4th, the transmission sitting on the road, so to speak. She could walk to work or catch the bus if it rained. Though she had a temporary solution to the problem, she needed money for a new car. It’s kind of difficult to carry groceries on the bus. Where would she get a down payment for a car?

Many people come across difficult financial situations

Jeff’s son had recently buried his wife. He traveled for his job and had nowhere to leave his little girl. Jeff therefore took care of his granddaughter, but the kid cost a lot of money. The shoes alone were breaking Jeff. He needed extra money, before the girl grew out of the shoes she was wearing that week. His retirement fund wasn’t enough to feed and clothe a growing little girl.

Anne’s house had burned a few years ago. Since then, she’d been living with anyone who would rent her a room or their basement. She’d love to get a place of her own, but she couldn’t work due to a disability. She made what she could online, but it wasn’t enough to pay for an apartment. Anne could use some extra money for a place of her own.

Neal was slowly losing his teeth due to diabetes and its resulting bone loss. He needed either dentures or dental implants, but both cost more money than his insurance at work would pay. Neal needed extra money for new teeth, but hadn’t an idea how to get it.


There are definitely advantages to getting a bad credit personal loan. Renovating your house, paying for specialty medicine, taking care of a growing granddaughter for your son, or laying out a down payment on a car are important things. However, the disadvantages are serious enough to give most anyone seeking a loan pause. We’re not trying to turn you off by any means, but a smart person looks at both sides of the coin.

You should also know that while you’re scrolling for personal loans, you’ll run across companies who locate personal loan companies for you. These companies are not lenders, rather they save you time and trouble. They talk to you, learning your needs, your repayment capabilities, and your time frame. Then they pair you up with the loan company that best suits your needs. This is an attractive thing to someone who’s never applied for a bad credit personal loan before. Now that you have all the facts, we’d love to hear what you accomplished with your loan.


Personal Installment Loans When You Need Money Now

Taking a loan is always a great option when you are looking to handle an emergency or work towards your dreams. However, it is important to carefully consider the decision to borrow money before applying for funding. Over the past few years, there has been a steady increase in the number of lenders to whom potential borrowers can turn.

Since it is important to ensure that genuine borrowers are protected from unscrupulous lenders, there was a need to set up a code of conduct to promote best practice. We also saw the need to make personal installment loan shopping easier by helping consumers find reliable lenders. Part of our mission includes providing knowledge so that consumers make informed decisions. Here are a few things you may want to know before taking installment cash loans.

Personal Installment Loan Definition

The actual definition or personal installment loans are a type of consumer loans that are paid back over time on a fixed schedule. The principal and interest are repaid in scheduled intervals, with the term of the loan ranging from a few months to as long as 30 years. A personal installment loan can be used for a variety of purposes. Compared to other types of loans such as payday and title loans, installment loans are seen are a safe and affordable alternative.

These loans can be unsecured, meaning that the repayment is guaranteed by your promise to pay as opposed to a physical asset. This has made personal installment loans accessible to low-income consumers and borrowers with poor credit. The flexible nature of the loans and predictable payments also make them ideal when you need quick cash to cover unexpected expenses.

If you need an installment loan, and know all about them already, you’re probably here because you’re looking for a lender.
If you don’t know all that there is to know about installment loans, we recommend you keep reading. It’s much smarter to find out all you can and then come back here to make an informed decision, rather than rushing and making a wrong one.

Types of Installment Loans

Exploring the world of loans can be confusing. Whenever you need money for any type of project or use, personal installment loans can come in handy. While most of these loans are unsecured, others will require a physical asset to guarantee repayment. A secured personal loan is easier to obtain because it is backed up by a valuable asset, making it less of a risk to the lender. There are various types of loans to consider. Having said that, you can only take out this type of loan if you have the required asset to put up as collateral.

On the other hand, unsecured personal loans do not require you to have any form of physical security. The downside is that the loans present more risk to the lender. As such, you have to have a good credit rating and a steady stream of income to obtain them. These loans also tend to attract significantly higher interest rates, making them costly.

Here are several types of quick cash installment loans to suit different needs.

Debt Consolidation Loans

Debt consolidation loans allow you to pay off several liabilities and consumer debts using a new loan. Some of the existing debts you may want to repay include medical debt, credit cards, or other personal loans. As the name suggests, the loans let you consolidate a number of payments into one monthly payment. These loans can be secured or unsecured, depending on the lender and your credit rating.

The lender may also require that the borrowed funds be used to pay off the existing debt to reduce the amount of debt you have. Loan amounts, terms, and interest rates vary from one lender to another.

Auto Loans

You can take out an auto loan when you need a car but are not able to pay the full amount upfront. In most cases, these loans will have a term ranging from 12 to 96 months, with fixed monthly payments, so you know how much you owe every month. While you may end up paying more for the car due to the longer loan term, you will enjoy the convenience of owning a car sooner. One of the dangers of auto loans is that the lender could repossess the car if you do not make payments.


Most people dream of owning property at some point. However, buying a house makes for a huge investment, making this dream beyond the reach of many. If you do not have the money to buy a house outright, you could consider applying for a mortgage. There are different types of mortgages, with most loans having a term of between 15 and 30 years with monthly repayments. Mortgages with fixed interest rates have standard monthly principal and interest payments, while those with varying interest rates have fluctuating monthly installments. In case you do not make payments on this type of loan, the lender can foreclosure your house.

Student Loans

Student loans are a special type of personal installment loans. You will receive a given amount of money while actively enrolled in school, and start making payments when the grace period ends after graduating. Like with other installment loans, there are different types of student loans available. Some have fixed interest rates, while others vary. It is important to note that interest on these loans accrues after the grace period ends. This means that if for some reason, you are unable to make payments, the monthly payments may end up being larger than they were previously.

Wedding Finance Loans

Taking out a Loan for a Wedding: Diamonds to Debt

This type of loan helps you finance your wedding expenses. Most wedding finance loans do not require collateral to obtain, but borrowers need to have good credit to qualify. The loan amount will depend on the credit qualifications of the borrower, income as well as the term length. Apart from traditional lenders, some rental halls and third-party lenders also provide this kind of financing. This is why you should invest time and thought before taking out the loan.

Vacation Loans

Finance My Vacation As Soon As Tomorrow

Vacation loans allow you to borrow money to travel. These personal installment loans can either be secured or unsecured. The secured loans are backed up by home equity and are generally affordable. On the other hand, the unsecured type has higher interest rates. Regardless of the type you choose, you have to have a steady income and good credit rating as proof of your ability to repay. Compared to using credit cards overseas, vacation loans are less expensive. The money obtained can be used for a wide variety of needs.

Medical Finance Loans

The Ultimate Guide for Taking Out a Medical Loan

Medical emergencies can be difficult to handle if you do not have the amount of money required to settle the bills. This is why some people opt to take out a personal loan to pay off the related expenses. However, taking out such a loan will be more costly than paying the medical bill outright. To increase your chances of qualifying for the medical loan and borrowing larger amounts, you should have a steady income and a good credit score. With a large number of lenders in the market, you should compare interest rates before making a decision. In case you are behind on debts, debt consolidation can help reduce the financial burden.

Home Improvement Loans

Once you have lived in your house for several years, you may want to make some changes. Whether you are looking to make it more comfortable or functional, home improvements will offer you numerous benefits. If you want to put up the property for sale, a home improvement loan can help you add value to your property. This will allow you to make repairs and upgrades, allowing you to repay the loan in full once you sell the property. While it is possible to obtain such a loan without collateral, using home equity to back up the loan presents a more affordable option. This would be particularly important to consider if you are applying for large amounts.

Co-signer Personal Loans

You may find it difficult to get a personal loan if you have a low credit rating. However, there are a number of options that may be open for you. You can get someone with a steady income and good credit score to help back up your loan. This means that the second borrower may also be held responsible for the debt. To increase your likelihood of securing funding, the co-signer should have a better credit score and history than the borrower. The loan term, interest rate, and borrowing amount will depend on the qualifications of both individuals.

How Can I Get an Installment Loan with Bad Credit?

It is normal to find yourself in need of some extra cash at some point. When this happens, you can identify a suitable lender and take out a personal loan. However, if you have bad credit, you will need to do some research on installment cash loans for borrowers with bad credit. Although there are a number of lenders who can provide installment cash loans bad credit, it is always advisable to proceed with caution.

The first step would be to familiarize yourself with what constitutes bad credit. You will also need to identify lenders through a third-party who is not in the business of giving loans. Since we help consumers to find lenders easily, working with us will ensure you get unbiased feedback.

The Pros and Cons of Bad Credit Loans

To make an informed decision, it would be important to understand the advantages and disadvantages of these loans.  This information will be of great value when making financial commitments.

Generally, bad credit loans are fast to get, with applications being available online and responses taking a few hours. This makes them perfect for when you are in a financial emergency. The interest rates are usually lower than those charged on credit card debt, and the repayment term could be as long as five years. When shopping around for bad credit loans, you will have many lender options. The loans could also provide a chance to improve your credit score if you make payments on time.

Bad credit loans are not without their downside. Since your credit score will project you as a risk to the lender, interest rates are likely to be high. Personal installment loans with bad credit may also contain hidden charges. There is also a good chance that the lender will require you to back up the loan with some form of security. Lastly, some of the lenders in this segment may not be licensed.

How to Improve my Chances of Getting an Installment Loan with Bad Credit

There are several things you can do to increase your chances of obtaining personal installment loans with bad credit. One of the best ways to ensure success is to start before you actually need the money. In case it is not an emergency, you can consider taking the necessary steps to improve your credit score. This will include making on-time payments on your credit cards, ensuring low credit utilization and stopping new credit applications. If you are in a financial emergency, it might help to ask the loan officer for an interview to prove your creditworthiness. Some of the documents you may need during this process include:

•    Tax returns from the last few years
•    Details of your job history
•    List of some of the valuable assets you own
•    A list of the unsecured debts you currently have
•    Bank statements for your accounts
•    Information on whether you receive alimony or child support

There are a number of creative ways through which you can secure funding if you have bad credit. Some of the options available are credit unions, borrowing from family and friends, getting a co-signer, taking a home equity loan, peer-to-peer lending, and online lenders. If you opt for a credit union, it is advisable to approach one that is affiliated with your employer or one that is community-based.

Are Installment Loans Good for Your Credit?

Today, your credit score plays a vital role in determining whether you can access loans. This is why it is important to develop a financial culture that will help build your score. It is equally important to consider the impact personal installment loans may have on your score. Before taking out an installment loan, some of the options you may want to consider include seeking financial assistance from government agencies and nonprofits, requesting for payment extensions from your bill providers and getting side jobs to help boost your income.

How Installment Loans Can Help Your Credit Score

Taking out an installment loan can provide a chance to build a positive credit history. However, you will have to make payments on time for this to happen.

  • Diversify your debt – one of the main benefits of installment loans is that they help to diversify your loan portfolio. When you have a number of loans open and can pay them off in time, this will have a positive impact on your credit history. Over time, such loans can help to boost your credit score.
  • Save you money – most personal installment loans have lower interest rates than credit card debt. This means that you will end up paying down the debt faster. In effect, this will not only save you money but also ensure that you owe less debt. Less debt to your name will eventually raise your credit score.
  • Improve your payment history – one of the important factors that determine your credit score is how punctually you pay off debts. Since most installment loans have predictable payments, you will be in a position to plan for the scheduled payments. These loans present a great opportunity to prove your creditworthiness by making on-time payments. Borrowing a small amount, in the beginning, can go a long way in helping to improve your credit score.

How Installment Loans Can Hurt Your Credit Score

For all the benefits that personal installment loans can have on your credit score, they are not without a downside. Here are some of the ways through which these loans can hurt your credit score.

  • Proof of missed payments – just the same way they can be proof of on-time payments, installment loans can also be proof of missed payments. Such a record will not only portray you as an unreliable borrower but could also attract additional fees from the lender.
  • It shows up as a credit inquiry – every time you apply for any kind of credit, the information shows up as a credit inquiry. Regardless of whether or not you get approved, this is likely to lower your credit score. The good news is that you can make on-time payments to make up for this.
  • Higher debt levels – what happens after you obtain an installment loan will have a huge impact on your credit history. Borrowers who use the money to finance further spending end up in more debt. This eventually makes it harder to pay off the debts, hurting their credit score in the long run.

The effect that these types of loans will have on your credit score will largely depend on your financial behavior and habits. If handled well, these loans can help you boost your credit and organize your finances.

What Is the Difference between an Installment Loan and a Personal Loan?

There are many types of loans available in the market today. This makes it necessary to understand what distinguishes them so you can choose the product that meets your needs. While a personal loan is an unsecured loan meant for meeting current financial needs, an installment loan is a type of personal loan used for emergency expenses or other short-term financial needs.

Generally speaking, personal loans are granted to eligible borrowers who need additional cash to meet a wide range of needs. Consumers can access different types of personal loans, each with its own set of interest rates, repayment term, and other terms. Installment loans, on the other hand, are repaid over a specified period and have a predetermined number of scheduled payments.

Personal installment loans differ from other fast-cash loans in several ways. For instance, while payday loans are repaid in a lump sum on a set date, installment loans are paid back in intervals and regular installments. This means that unlike payday loans, installment loans can extend over several months.

How Are Loan Installments Calculated?

While we can help you find lenders from whom to borrow, you will ultimately be the one to make a choice. To choose the best lender to work with, one of the factors you should consider is how much they are charging you. Most people do not pay attention to the details when applying for personal installment loans. Such people end up paying higher interests than they would have if they did due diligence. There are two main ways of calculating your monthly installments.

Using an Excel spreadsheet

This is perhaps one of the easiest ways to calculate your equal monthly installments. The three variables required for the function are the rate of interest (rate), number of periods (nper) and the present value of the loan (pv). Rather than equated monthly installment (EMI), the function for excel is PMT. The formula to use will then be:

= PMT(rate,nper,pv)
The result you get will either be a negative number or a figure in red. This is because it indicates the cash outflow of the borrower.
Using a mathematical formula
In case you cannot access the Excel spreadsheet, you can use a mathematical formula to determine your loan installments. The mathematical formula is:

EMI = [P x R x (1 + R) ˄ N] / [(1 + R) ˄ N – 1]
Where P represents the loan amount, R is the interest rate per month, and N is the number of monthly installments.
This formula gives the same result as the one obtained when you use the Excel spreadsheet.

Benefits of Calculating Installments

There are many benefits of familiarizing yourself with how loan installments are calculated. This will help you to identify lenders with low-interest rates as well as those with hidden charges. Once you do this, you will be in a better position to choose the most affordable personal installment loans. Knowledge of how much you will be paying every month will also come in handy when making financial plans.

When you calculate the installments before applying for a loan, you will be able to establish whether you can afford the loan. In the end, taking into account the term of the loan, you can find out the amount you will pay as interest on the loan. It would be important to compare your results with the ones provided by the lender.

How to Find Online Installment Loans

There are many institutions that offer installment loans today. Both traditional lenders and online lenders can provide the funding you require to meet your financial needs. However, online lenders tend to have a faster and easier application process. Before submitting your application, you should ensure that you qualify for the loan you intend to take out. This includes having a good credit score, a steady income, and any collateral required.

Work with an Online Loan Broker

An online loan broker is a person who looks and finds the most appropriate loan for you in exchange for a fee. In most cases, you will only be required to pay the application fee if you accept the loan offer. One of the benefits of working with online brokers is that they know some of the best lenders in the industry. At the same time, employing an online broker will help you save the time you would have spent researching on your own. However, it is important to make sure that you select an online loan broker with a good reputation.

Find a Loan Aggregator

An online loan aggregator is similar to a loan broker in a number of ways. However, rather than charging you a fee, they will charge the lender. Loan aggregators focus on matchmaking and will match your lending profile with suitable loans. By allowing you to compare the different options available, this helps to save time and also settle on the most suitable loan for your needs. Just as with a loan broker, the importance of working with a loan aggregator with a good reputation cannot be emphasized enough.

Use Online Loan Reviews Sites

Another option you can explore when looking for online installment loans is loan review sites. When you choose this method means that you will have to use your judgment to determine whether the site is reliable. At the same time, you will have to familiarize yourself with the different types of personal installment loans available in the market.

Thirdly, it would be important to dedicate enough time to find the best products.  The online revolution has greatly changed the way individuals and businesses access credit. However, online financing options are associated with a certain level of risk. We simplify the process of finding online installment loans. By researching through us, you will have the assurance that the lender you get is professional. We make the process of finding online personal installment loans easier and quicker for you.

There is no doubt that, when used properly, loans can help you achieve your financial goals. Whether you need funding for your business, wedding, home improvement, or to buy a car, there are a variety of options available for you. However, going through these options in search of what works for you can be cumbersome. It is important to understand what personal installment loans are before taking them out. With this information, you will be in a better position to make the most of the opportunities available to you.

This will not only help in financial planning but also contribute to a good credit score. We aim to help consumers to identify and deal with reliable lenders in the industry. By making your work easier, you will find the funding you need quicker and meet your financial need more effectively.

Also, as a third-party that is not involved in the business of loans, we also work to protect borrowers from unlicensed and unscrupulous lenders. All the lenders we help you find abide by a set code of conduct and are guided by certain guidelines. We commit to ensuring the highest levels of privacy and security of personal information for our clients seeking personal installment loans.