Do you require money to finance on important projects? Do you need funds to buy a vehicle for your food or services business or need to buy a building for business expansion? Regardless of the nature of the need, you can take help from an installment loan. Most of the lending companies don’t ask for a perfect credit score, or they don’t ask for a guarantee in the form of the collateral. As compared to the other loans, these loans are easy to apply to, and their application process won’t take your whole day.
What are Installment loans?
In simpler terms, an installment loan is where a borrower agrees to pay back the amount following a schedule that usually involves monthly payments. For example, you borrowed $1,500 from the lender with an interest rate of 12%, and the total amount you have to pay in a year is $1,680. To make the payment on time, a borrower has to pay $140 each month, for a whole year. Once the borrower pays all the installments, including interest and principal, he or she is free!
Where can I find an Installment Loan for my business?
It is better to start ‘installment loan hunt’ from your bank, as they already have your credit history and are already familiar with your creditworthiness, they will give you a loan with an affordable interest rate. With that estimate, you can compare the number with other lenders. Multiple online lenders are offering installment loans as well. Do your research carefully and make sure your lender had good reviews in the past.
Multiple types of Installment Loans are available in the market, for example, mortgages, car loans, and student loans secured or unsecured loans. Keeping your business’s financial need in mind and the amount of money you need, apply for an installment loan. Be mindful, unlike short-term loans, installments loans comprise of monthly payment terms set by the lenders and inflexible interest rate.
What credentials do I need to qualify for a loan?
Each lender has different eligibility criteria on the basis of your financial standings and installment loan type. Some lenders share similar qualification criteria, such as:
- You must be living in the same State where you are applying for the installment loan.
- You must be 18+.
- No bankruptcy or foreclosure.
- Consistent cash flow is a must!
- Updated and documented bank accounts
- Driving license or passport for identification
With these documents, you can apply for the installment loan efficiently. Depending on your potential lender, you can get the loan in two to three business days.
Merits and Demerits of Installment Loans
With payment terms, these loans are remarkably beneficial and profitable for a business owner. If your business is generating enough profit, you can pay off the debt a bit quicker than planned. Installment loans allow the lender to slowly pay the debt, but the interest rate tends to keep increasing. Whether you decide to pay off the debt in three months or twelve months, your potential lender should sign it off. Another perk of the installment loan is you can get a loan even a poor credit. So, if you were reluctant to apply for a loan because of bad credit, feel free to apply for one now. With 24/7 availability, you can get an installment loan to speed up the growth of your business anywhere anytime.
Most installment loan lending company don’t disclose the total sum of money that a borrower needs to pay. So, this comes as a shock when the borrower is running short of cash because the total interest rate wasn’t added carefully. To save yourself the scam and review and compare your funding options twice before making the final decision.
Tips and hacks to hunt a perfect installment loan for your business
Before you sign the dotted line, you must be aware of the term of your loan payment, whether they are going to last for six months or twelve months. Other than this, make sure you and your lender agree on the same amount. And as a borrower you have agreed to pay back the amount, so make sure your business has consistent cash flow. Lastly, due to any reason, if you fail to make the repayment on time, your potential lender can show you some leniency. Inform them beforehand and avail flexibility options such as refinancing, an extension of the deadline, or waive late payment fee.
The more flexibility you ask for, the higher the interest rate you have to pay. When a borrower stretches the payment term, the monthly payment amount decreases resulting in more interest rate because of the extended terms. As you are the borrower and a business manager, so you have to take a decision keeping your business and financial needs in regard. Overall, paying more money in total is not profitable for the business. If these terms are hard for you to digest, then know that infinite funding options and available in the market.
Do you think an installment loan can give a financial boost to your small business? Head over to our website and explore a wide range of affordable and low-interest rate funding options. For more updates and tips and tricks follow us on our Twitter (@Onlinecheck) and Facebook (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.