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What is an Installment Loan?

An Installment loan is any kind of loan that is repaid in installments (meaning in small increments).

Most types of loans are installment loans since they are typically repaid by making a series of monthly payments. For those facing cash shortages and looking to get financial assistance, installment loans can be a saving grace, since they’re typically the most affordable way to borrow money.

Installment loans are also a great way to fund major purchases, like buying a new car, a home, or starting a new business. While lenders will almost always charge interest for installment loans, you should look at that interest as the price you pay for the convenience of being able to raise lots of money quickly.
 

Different Types of Installment Loans

When it comes to installment loans, there are a ton of different variations and options available. Below you’ll find detailed explanations of the different types of installment loans, including information about how to get them, and which forms are best for specific financial situations.
 

Direct Lender Installment Loans

One of the first things you’ll want to look for when seeking out an affordable installment loan is making sure that you’re borrowing from a direct lender.

Getting a direct lender installment loan means that you’re borrowing money from the same company that you’re speaking to about the terms of your loan, rather than using them as a middle-man to borrow money from someone else.

And here’s the main reason you’ll want to get your loan from a direct lender: borrowing through a middle-man has added costs, since both the lender and the middle-man need to make money on your loan, meaning you’ll pay higher origination fees (cost for taking out a loan), interest rates and other added costs.

Even if you have bad credit, you’ll still want to seek out a direct lender for your installment loan, because this can reduce your cost of borrowing money by hundreds to thousands of dollars.
 

Bad Credit Installment Loans

Installment loans are by far the most popular form of lending for people with poor credit scores, since they’re often the only way that anyone without great credit will be allowed to borrow any money.

If you’ve got credit problems, you can definitely rely on bad credit installment loans to raise money quickly, because this form of lending most often won’t require you to face a credit check (or will require one, but won’t deny you access to money simply because of your poor credit score).

That’s great if you need to borrow money in a hurry, but it’s also an extremely risky proposition because this form of lending often comes with some major catches that lead to additional expenses.

Borrowing money from a lender who specializes in offering installment loans for people with bad credit may not be in your best interest, because these types of lenders often cost significantly more to borrow from than the more reputable lenders that don’t exclusively service people with credit problems.

Think about it like this – lenders who offer installment loans for people with poor credit take on a massive risk each time they issue a loan – will the borrower pay back their loan, or will they disappear, refuse to pay back the loan or default on it in some other way?

Lenders who focus on getting money to people with credit problems tend to run into more issues with collecting the money they’ve loaned out, so they have to charge more money to offer their loans in the first place. What’s that mean to you? Getting the money you want from these types of lenders is going to come at a premium price. You’re going to pay more than you would elsewhere since you’ve got to help the poor credit lender cover their risk. That means higher interest rates, origination fees, penalties and other associated costs.
 

No Credit Check Installment Loans

When you’re looking to take out a personal installment loan, don’t simply run to the lenders offering installment loans with no credit check, because like we outlined above, this could end up costing you some significant coin.

You shouldn’t be afraid to face a credit check when you go to borrow money, because doing so could save you a great deal of money over the course of your loan.

In fact, even if you have damaged credit, it may be in your best interest to face a credit check before taking out your loan, because lenders who run credit checks on their borrowers tend to offer better loan terms and lower interest rates than lenders who give money out without requiring a credit check.

Remember that lenders have to determine who they should (and especially who they should not) allow to take out a loan. Each time they issue a loan, they’re taking on a serious risk. What if the borrower doesn’t pay them back?

Lenders use credit checks to ensure that their borrowers are credit-worthy (by verifying that they have used finances responsibly in the past), but they also use credit checks to ensure that their borrowers are telling the truth about who they are, where they live, how much money they make, etc.

Any lender who allows you to borrow money without making you face some form of a credit check isn’t covering all their bases, and is opening themselves up to serious risks, which they have to hedge by charging excessive interest rates, fees, penalties and other added costs that mean you’ll be paying more for the opportunity to borrow money from them.

Don’t work with these types of lenders! Instead, find one that requires a credit check, but who also allows people with credit problems to borrow money.

Tell this lender that you have credit problems – tell the truth about what led to them – but then explain that you’ve sorted things out and are ready to use financial assistance more responsibly now that you have your cards in order.

This one simple decision could stand to save you hundreds to thousands of dollars the next time you need to take out a loan!
 

Online Installment Loans

Lots of lenders now offer fully-online installment loans, with some lenders even willing to offer money online without requiring any form of credit check.

This seems like a great deal, especially if you’re in a hurry, don’t have time to get to a place of business with paperwork and such, or if you have major credit problems and don’t want to face a credit check, but you’ll need to keep one important point in mind before agreeing to borrow money from an entirely online lender: there are many scam artists in this business.

We’re not talking about the actual lenders who issue loans and operate just like any other lender, charging interest, charging origination fees, collecting money, etc., we’re talking about those people out there who advertise that they’re offering online installment loans, but who don’t actually deliver on those promises.

You’ll need to be extremely cautious about choosing who to borrow your money from, because savvy con artists have begun setting up shop online and started harvesting information from would-be customers for the sole purpose of stealing their identities.

Before you submit any paperwork to a fully online lender, especially one advertising that they offer no credit check or bad credit installment loans, make sure to call their place of business and speak to a real person. Ask for their license number and check to make sure they’re registered somewhere as a real business.

Look at their ratings with the Better Business Bureau and be sure that you vet them fully to ensure that you’re not speaking with a con artist. You’re already stressed out from facing a difficult financial situation and needing to borrow money in a hurry, don’t make matters worse for yourself by getting scammed!
 

Secured vs. Unsecured Installment Loans

When it comes to any form of borrowing – whether you’re talking about great credit or poor credit loans, long term or short term loans – one of the most important things to think about is whether or not you’re going to get a secured loan.

Securing a loan is the process of offering a form of collateral to the lender, on the promise that they will be able to take your collateral from you if you fail to pay back your loan.

This is a risky proposition, because you could stand to lose whatever item (or items) you offer up as collateral to secure your loan, but it’s worth it in the long-run because you shouldn’t be borrowing money that you aren’t sure you’ll be able to pay back, and because providing a form of collateral to your lender will help reduce your cost of borrowing in the first place.

When you secure a loan by using a piece of property or some other item as collateral, lenders will almost always be able to provide you a loan with a lower interest rate than they could offer if you didn’t have anything to secure the debt.

The reason lenders like issuing collateral loans, and the reason why they’ll cut down your interest rate should you decide to use collateral to secure your loan, is that they have some protection against the potential that you would default.

When a borrower defaults on an unsecured loan (one without any collateral involved), the lender is unlikely to be get back the money they let the borrower take. For that reason, lenders have to charge higher interest rates on unsecured loans, since they carry greater risk.

To reduce your borrowing costs, make sure that you choose to take out a secured installment loan. Use a form of collateral to secure your loan, like your car (with a car title loan) or your house or a piece of property (with a mortgage or other similar collateral loan).

Choosing to use collateral to secure your loan is one of the best ways to reduce your borrowing costs, and save you substantial amounts of money.
 

Short Term Installment Loans

While other types of loans can take days or even weeks to get approved and funded, most short term installment loans can be approved and awarded within the same day that they’re requested. Some short term installment loan lenders even promise to get you the cash you want within minutes (though this isn’t always possible, and is oftentimes an exaggeration on the lenders behalf).

If you’ve ever heard someone talk about installment loans for people with bad credit, then it’s highly likely they were referring to a short-term installment loan. The reason these are the most popular form of loan for people with poor credit is that they sometimes don’t require a credit check.

Examples of short term installment loans include convenient (but sometimes extremely expensive and often risky) forms of lending like payday loans and cash advances. These types of loans are very easy to get, often quite fast in delivering the money they promise, but they’re also relatively risky, because they can sometimes leave the borrower in a much worse financial situation than they were in before they went to borrow money in the first place.
 

Examples of Short-Term Installment Loans

Below you’ll find some examples of short-term installment loans, including information about their pros and cons, and how to get them.

Be sure to read through all of your option on this page before determining which type of installment loan will work best for your specific financial situation.
 

Payday Loans

Payday loans are one of the fastest ways to raise money, but they’re also risky and relatively expensive compared to other forms of even short-term financing.

When you take out a payday installment loan, you’re going to be allowed to borrow about as much money as you’re set to receive with your next paycheck, but you’ll be required to pay this amount back (plus interest) by your next payday.

This is the problem inherent in payday loans, and the reason they’ve been banned in 14 states – if you’re already facing financial trouble, enough that you need to take out a loan, how are you supposed to pay back that loan plus borrowing costs by the time you receive your next paycheck?

And this is the financial trap that many payday loans borrowers find themselves stuck in – they’ve entered a never-ending cycle of increasing debt, since missing their loan’s due date opens them up to interest rate hikes and excessive penalties and other associated fees for failing to pay back their loan on time.

Now, that’s not to say that all payday lenders should be avoided. Some offer payday loans with substantially longer time frames, allowing you to pay them back well after you’ve received your next check.

You’ll have more time to pay back your loan, you’ll be allowed to pay it off in smaller increments, but you’ll also likely end up having to pay a higher cost to borrow since the extended repayment time allows for more interest to rack up, causing you money in the long-run.

Payday loans may be one of the most popular forms of installment loans with no credit check, and they’re definitely one of the most popular ways to get money if you have bad credit, but taking one out also risks your financial future because of all the potential downsides involved.

Before you take out a payday loan, make sure you don’t have any other options to get the cash that you need. It’s almost always better to borrow money in some other way.
 

How to Get a Payday Loan

You can apply and get approved for a payday loan in person or online. If you decide to apply for a payday loan online, remember that online payday loan companies typically award much smaller amounts of money compared to their brick and mortar peers.

The payday loan application will require you to provide some form of ID, and at least one of your recent paystubs, as proof of income, so be prepared to offer this information when you start the applications process.

If you are approved for a payday loan, you will then be awarded a check which you can cash immediately for up to the value of your next paycheck. Just be sure to pay it off in time, otherwise you will face a higher interest rate and other penalty charges.
 

Auto Title Loans

Auto title loans are short term installment loans that use the value of your car as collateral to secure the loan you’re taking out.

The best thing about auto title loans is that some lenders (like us here at City Loan) will allow you to get one without sacrificing the use of or access to your vehicle.

We know that you need your car to get around, get to and from work, drop off or pick the kids up from school, and run the errands that are required by daily life, and we will respect that need by allowing you to drive your car however, whenever and wherever you want as long as you keep up with your monthly payments.

Auto title loans are available from City Loan online, over the phone, and in person. We’re able to lend money in several states too, so it’s likely that you’ve got a City Loan office in the nearby vicinity! Whether you’re in Arizona, California, Missouri, New Mexico, Texas, South Carolina or Utah, we can help you get the cash you want today

Car title loans award you with a cash loan based on the value of your vehicle, meaning that the more your vehicle is worth, the more you’ll be able to borrow. Need to raise a lot of money in a hurry? There’s no better way than turning the equity you’ve got in that vehicle into cold, hard cash!

Another benefit to City Loan Long Beach's auto title loans is that we may be able to help even if you don’t have a perfect credit score. We do require a credit check (if you’ve been reading this whole post you’ll understand why that’s a good thing!), but oftentimes, we can still help borrowers who have problems on their credit report.

In fact, even if you’ve already been told “No” by several other lenders, there’s no reason to believe that we won’t be able to get you the cash you want today. Don’t give up! As long as you’ve got a car that’s paid off (or nearly paid off) and worth several thousand dollars, we may be able to help.
 

How to Get an Auto Title Loan

Like a payday loan you can receive an auto title loan online or by visiting a local office, but the best way to get one is by calling us at City Loan right now.

Call 888-238-9085 to speak with one of our loan officers and find out how much money you can get today. Or, if you’d prefer to fill out our application online, feel free to enter your information into the form at the top of this page and we’ll get in touch with you as soon as possible.
 

Cash Advances

Cash advances (typically called “Credit Card Cash Advances”), let you turn the amount of credit you’ve got left before maxing out your card into cold, hard cash. Cash advances are almost always issued by credit card companies, but sometimes you can get them from other lenders as well.

One of the big downsides to cash advances is that they’re typically only offered in small increments, since the amount of money you’re able to borrow is based on the amount of credit you haven’t yet maxed out, and if you’re facing financial problems and in need of some assistance, then we’re guessing that you’re probably already near your credit limit.

Another downside to credit card cash advances is that they’re typically quite expensive, because they come with a very high interest rate. Due to that high interest rate, and the limited amount of money that cash advances usually offer, these types of loans should be avoided unless you’ve already attempted all other avenues, and been denied access to funds from any other sources.

Like payday loans, cash advances can lead to long term financial trouble, so you won’t want to rely on them unless you don’t have any other options.
 

Long Term Installment Loans

Long term installment loans are typically only available to people who have maintained good credit via responsible financial behavior.

In most cases, long term installment loans require a successful credit check (and a good credit score), as well as a steady, provable income level, plus the ability to prove that the borrower is in good financial standing.

These types of loans are typically the best way to raise a large amount of money, as they tend to come with the lowest borrowing costs and best repayment terms, but they’re also very difficult to qualify for. Three typical forms of long term installment loans are mortgages, student loans and car loans.
 

Mortgages

A mortgage is a loan that helps finance the purchase of a home or other piece of property.

Mortgages allow you to borrow massive amounts of money (typically tens of thousands to hundreds of thousands or even millions of dollars), and they often come with the best interest rates of any form of lending, which is why they’re so difficult to get.

Most times, mortgages are only available to people with good credit scores (at least 620 is the number many experts refer to), steady jobs and stable income. The bad news is that the majority of people looking for an installment loan probably won’t qualify for a mortgage.

The good news about mortgages is that if you do quality for one, you’ll be able to raise a great deal of money in a relatively short period of time (it may take a few days to a couple weeks to get approval), you’ll probably have a low interest rate, and likely get many years to pay back the debt.

There’s really no better way to borrow money than by taking out a mortgage, but you’ll need to remember that it’s also extremely difficult to qualify for one, and that you’ll have to deal with a mountain of paperwork to get it.

Also, keep in mind that you won’t want to get a mortgage unless you’re sure that you can keep up with the monthly payments, as defaulting on the debt will lead to having the home or piece of property you secured the mortgage with being confiscated by your lender.
 

How to Get a Mortgage

Mortgages are typically offered by traditional banks that specialize in mortgage lending. To obtain a mortgage you will have to go through a series of meetings with a mortgage broker who will structure a deal and a repayment schedule for you. This can take weeks to finalize, so if you’re in a hurry, you’ll want to look at other options for borrowing money.

To qualify for a mortgage, you will have to pass a credit check, provide proof of income and fill out a great deal of paperwork. Once the paperwork has been processed and you are approved, the value of the loan is typically sent directly to whomever you’re purchasing your home or property from, rather than being distributed to you.

That’s one of the biggest downsides to a mortgage loan – they can’t really be used for financing anything other than housing or real estate purchases. If you’re looking to raise money for something else, then a mortgage won’t help, even if you are able to qualify for one.
 

Student Loans

Now that college has become so expensive that most people can’t afford to simply pay for the tuition and other expenses out of pocket, student loans have become pretty much ubiquitous.

A huge percentage of Americans are forced to rely on student loans to pay for their college costs, which means that many more people than ever before are getting involved with long-term installment loans.

Student loans can be thought of as one of the longest forms of installment loans too, since they often come with repayment terms running several decades.

These loans are usually obtained from a bank or a student loan company, but they don’t always require having a good credit score (since many students take them out before they’ve even established a credit rating at all).

After the student has graduated from college, they are usually required to begin making monthly installment loan repayments to pay back their debt, including interest costs on top of the original principal amount that was borrowed.

Student loans are an extremely popular form of long term installment loan, but like mortgages, they can’t be used for anything, but are supposed to be spent on education costs.

In some cases, however, it’s possible to get a student loan and spend the money on other things (since you can get a student loan for living expenses too), but that’s typically only going to work for a very small percentage of the money you borrow from a student loan lender.

Also, it’s important to keep in mind that student loans are not discharged in bankruptcy (except under very limited conditions), so you should really only consider student loans at all if you’re absolutely certain that you’ll be able to keep up with the monthly payments, or you’ll be stuck in financial distress for perpetuity.
 

How to Get a Student Loan

Student loans can also be obtained by going directly to a financial institution or to a company that specializes in awarding student loans.

They’re also available from the Federal Government (which is the best way to borrow money for college), and sometimes directly from the school that you’re attending itself as well.

Loans are usually awarded in installments, where the student will receive some set amount of money each semester, or each year, depending on the lending schedule worked out with the lender.
 

Car Loans

Car loans are used to help finance the purchase of a new or used car. Cars certainly aren’t cheap, which is why so many people end up needing a loan to cover the costs of purchasing their next vehicle. In many cases, car loans are taken out directly from the auto company where the car is being purchased. For example, most car dealerships have the ability to issue loans (from their parent organization or a sister organization or some other affiliated lender) during the process of purchasing the car, so that new buyers are able to get the money and purchase the car all at once.

The process of qualifying for a car loan isn’t all that easy either, since it requires having a good credit score and being able to prove that you will be able to keep up with future monthly payments.

Car loans are typically issued for a period of several years, giving you plenty of time to pay back the loan in small, affordable increments, which is what makes them qualify as a long term installment loan.

Like all other forms of lending, car loans come with interest costs and other fees, each of which is typically going to get calculated based on your credit score and other negotiated loan terms.

And like the other forms of long term installment loans discussed in this post, car loans can only be used for a specific purpose – purchasing your next vehicle. If you need to raise money for some other reason, then you’ll need to look elsewhere.
 

How to Get a Car Loan

Car loans can be obtained from a huge variety of sources, like financial institutions and credit unions, car dealerships and auto-maker financing divisions.

There are numerous car loan companies available online and in-person, all offering slightly different interest rates, terms and conditions.

A lot of paperwork and signing will be involved in getting a car loan, so be prepared to prove your identity, have your credit checked, and fill out a variety of forms before you’re able to get your loan.
 

What Form of Installment Loan is Best For Me?

When you’re shopping around for an installment loan, it’ll be important to weigh the pros and cons of each type of loan before determining which one will work best for your unique financial situation.

If you’re in a hurry, but you need a substantial sum of money, then vehicle title loans will probably be your safest, most affordable, and most reliable option.

Remember, title loans allow you the benefit of raising lots of money (about as much as the wholesale value of your vehicle), and they come with the benefits of being a secured form of lending (using your car as collateral) which reduces the interest rate you’ll be forced to pay for the convenience of being allowed to borrow money.

While student loans, mortgages and car loans are excellent ways to raise money for specific financial costs, they’re limited in that they can’t be used to provide immediate cash assistance for things like rent or paying off unexpected medical bills.
 

City Loan Long Beach Can Help!

If you need to raise money for something other than purchasing a house, paying for school or buying your next vehicle, then car title loans should rank right at the top of your list of available funding opportunities.

The best thing about car title loans from City Loan is that they allow you to raise lots of money quickly, all without having to sacrifice the use of or access to your vehicle. As long as you don’t fall behind in your monthly payments, we won’t restrict your driving in any way!

There’s a reason that people refer to us as the best lender for people with poor credit – even if you have black marks on your financial record, we may still be able to help.
 

Find a City Loan Near You!

Our primary office is located in Long Beach, California at:

Address: 
3431 Cherry Ave,
Long Beach, CA 90807

You might not be close enough to our Long Beach location, and that's okay! Our service area covers a wide range of states including: UtahCaliforniaArizonaMissouriNew MexicoTexas and South Carolina. Remember, we make getting the money you need a breeze!

Take advantage of CIty Loan Long Beach's fantastic customer service and call us today at 888-238-9085. You'll get the money you need in no time without any of the hassel you might face from other lenders.