In these times, many people are worried about money and need to borrow money to keep things afloat. Needing money quickly can come from a variety of unexpected places—a boiler breaks or your car tire needs replacing. Whatever your reason, you want to make sure that the company you choose to borrow from is suitable for you.
To do this, you will need to research installment loan lenders. Thankfully, there are many top and leading installment loan lenders available with a quick Google search.
To make the process as easy as possible for you, we will run through the leading online installment loan lenders of 2021 in this article.
What Are Installment Loan Providers?
Installment loan providers are companies that lend money to people as a lump sum, which is repaid in installments.
This means that you will know the amount to be repaid each month, allowing you to calculate this into your monthly budget.
Here’s an example, if you borrow $20,000 and the APR is 8.99%, the repayment period is set at 60 months, you will be repaying $415 every month over five years.
Knowing all of this information before you take out the loan will make sure that you know whether or not you will be able to borrow the amount of money that you need and if the lender's terms can be met.
Types of Installment Loans
There are 3 main types of installment loans:
Mortgage - A secured loan for a house with the house as collateral.
Personal loan - An unsecured, lump-sum loan.
Auto loan - A secured loan for a car with the car as collateral.
How Will Installment Loans Affect My Credit Score?
Initially, you will see that there is a small "dip" in your credit score. This is because the loan provider will do a credit check when considering your application.
However, this is not an issue if you take out the loan and make all the repayments on time. Doing so will positively affect your credit score, making it better in the long run.
However, if you do not make all of your repayments on time then your credit score will only get worse.
If You Have a Bad Credit Score (Or No Credit Score) Consider These Providers
One of the first things that a lender will look at when considering your loan application and whether or not they will want to offer you money to borrow is your credit score.
Unfortunately, if you have had incidents in the past, then these will negatively affect your credit score. Thankfully, there is a handful of leading online installment loan lenders for people with bad credit scores or even no credit score at all.
One of the best online lenders is a company called SimpleFastLoans because as long as you have a credit score of 580 and above you are eligible for a loan.
Some of the best online loan lenders requiring a low credit score are:
Upstart - The minimum credit score is 600.
Avant - The minimum credit score is also 580.
OneMain Financial - There is no minimum credit score required. The APR here starts at 18%.
LendingPoint - The minimum credit score is 585.
Now, we will look in-depth at the leading online loan lenders of 2021, comparing their rates, fees, and time scales.
As stated, Upstart requires a minimum credit score of only 600. This means that if you are rejected from other loan lenders due to your credit score, Upstart is a good place to consider.
They offer loans starting at $1,000 and go all the way up to the sum of $50,000. Upstart’s loan period is over 3 to 5 years with an estimated APR of 8.27 - 35.99%.
Marcus by Goldman Sachs
The loan amount of Marcus by Goldman Sachs is in the region of $3,500 to $40,000. The APR, however, is lower and is between 6.99 - 19.99 % with autopay and the fixed time period for repayments is 3 to 6 years.
Payoff requires a slightly higher minimum credit score, with at least 640. You can borrow anything in the region of $5000 to $40,000 over 2 to 5 years with an APR of 5.99 - 24.99%.
SoFi offers slightly longer loan fixed terms for anywhere from 2 to 7 years. You can borrow anything between $5,000 to $100,000 with an APR of 5.99 - 20.69% (with autopay). However, you will need a slightly higher minimum credit score of 680 to be considered for a loan here.
So, Is an Installment Loan Right for Me?
There are many different things to consider when looking at whether an installment loan is right for you. For example, a good place to start is by knowing your credit score. For a lot of companies, this is the first thing that they will check and your credit score will dip as a result of this "hard check". So, it is worth knowing beforehand if this check is worth it.
Knowing your credit score will also inform you of the installment loan lenders that you can consider. If you have a credit score of 600, for example, then there is no need to review lenders such as SoFi or Payoff, instead, you can inquire at another lender who will consider people with your credit score for a loan.
To be sure that your credit score will only be positively affected, so as not to worsen your situation in the future, you should calculate exactly how much you will be able to repay each month. As shown with the example above, if you cannot make the monthly repayment amount in addition to your usual monthly expenses then the loan is a bad idea.
Only take out a loan that you can afford to repay, otherwise, this will only negatively impact your credit score, making it harder for you to get a loan in the future if need be. Make sure that you thoroughly research the repayment fees and interest rates of the company that you choose.
To conclude, make sure you know your financial situation before looking for a loan. Once you are sure that this is the best option for you, consider some of the options that we have listed above as the leading online installment loan lenders of 2021.