What Do I Need To Know About Installment Loans and How They Work?

What Is an Installment Loan and How Does It Work?

Installment loans include almost every fixed-term loan that doesn’t count as open or revolving credit. But the types of installment loans we offer at Max Cash work as a short-term method to help deal with a sudden liquidity problem, just with a longer scheduled payment period.2 An installment loan can give you a lump sum of cash to help you out immediately. Then you pay off the balance over time with fixed monthly payments. That way, you don’t get hit with the same need for a large sum of money in just a short amount of time again.

Do you need cash for an unexpected expense? A personal installment loan could suit your needs.

How Do Installment Loans Work?

Almost every loan that isn’t open-ended or revolving line of credit like a credit card is likely classified as an installment loan. Essentially, you get a lump sum of money when you take out the loan from the lender. Then you pay it off in installments, hence the name. Usually, those scheduled payments occur in fixed monthly payments, as the standard. But some loans can have different repayment requirements, some shorter and some with longer terms. By and large, though, monthly payment or repayment within a month for most credit offered is the most common.

The terms for installment loans get determined as you finalize the loan application. That’s where the final loan amount, any fees, the interest rate, and the repayment term become set. Be sure you find the terms satisfactory to you before you sign, as the once you agree and the loan amount given to you, the terms become legally binding. So make sure you can live with the scheduled payments and the interest rate, because you can’t change them without refinancing which usually comes with fees. Or consolidating the debt with others or with some new credit to cover that you’ll have to repay as well.

How to Apply For an Installment Loan?

If you need a loan to get some extra money in a lump sum, you have several options. Personal loans count as a type of installment loan. You could also look at a cash advance, either from a lender or from a credit card. Larger, more traditional lenders like banks generally have higher minimum loans amount, usually $1,000 or more for most loans, depending on the reason you get one. If that amount is higher than what you need, you can go to small-dollar lenders that can usually provide loans for $100 to $500 minimum amounts. You should find one that allows you to repay over time with scheduled monthly payments rather than pay it back in one lump sum.

You should determine how much money you need and how fast you need to get it before deciding where to go for a loan. Online lenders can usually get you money within a day whereas more traditional lenders can take a week or more to fund a loan. That should help guide you on where to apply as your first priority. The best loan with the best terms and rates doesn’t do much good if it takes too long or requires more than you want to borrow.

After that, shop around and look at different loan options to figure out what will work best for you. If you have good credit, an unsecured loan could work well, since you should get favorable terms and interest rates. If you have less-than-ideal credit, you may have to find a loan secured by some sort of collateral to get approved or get better terms. Once you’ve found the lender and loan you want, just apply, provide all the required information, and finalize the loan if you get approved.

Having a liquidity problem where you’re just a little short? Max Cash connects you with multiple lenders with just one application.

Max Cash Connects You to Lenders to Help Get You an Installment Loan!

Do you need cash for an unexpected expense? Or for some other liquidity problem where you’re just a little short? A personal installment loan could suit your needs. And with Max Cash, we can connect you with multiple lenders with just one application.2 We have a variety of partners in many states that can help you get the money you need when you need it.2 Some lenders offer loans as low as $100, and several of our lenders can get you the funds in as little as 24 hours or one business day!1 2 4 Start an application here today to see if you qualify. At Max Cash, we work hard 7 days a week to get you connected to the most competitive rates through our network of verified lenders.4 5

By Jordan Radcliff

Jordan is a writer for Max Cash who covers a wide range of topics, including personal loans, credit scores, and side hustles.