Since installment lenders report your payments to credit bureaus, making payments on time can increase your credit score, while missed onds can worsen it.
Now Installment Loans are used for many different purposes, from buying a house or car, to covering expensive medical treatment, repairs, wedding expenses and more. Many people apply for Installment Loans because it is the easiest and fastest way to get enough money to meet their needs. However, what if you have a bad credit history? What if you have missed payments on the loan before? Can you get an Installment Loan with no credit check? Keep reading to learn more about this type of financing and what your chances are of getting a bad credit loan.
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What Is A No Credit Check Installment Loan?
You probably know that an Installment Loan is a fairly common type of financing that is used by borrowers to buy a house, a car, make a major purchase, consolidate debt, or cover other personal expenses. Typically, with Installment Loan, you will be able to get anywhere from $1,000 to $100,000 to cover all of your personal needs. Repayment terms can also vary from a few months to 30 years depending on type of the loan.
How Does Installment Loan Work?
So, an Installment Loan is a certain amount of money that you borrow and repay in regular monthly installments, over a certain period of time specified in the contract. It is already important to note that Installment Loans can be either secured (for example, by your car or house) or unsecured.
Installment Loans work like this: you research different loan offers in your state, pre-qualify, choose the best one, apply, wait for approval, and then get paid. As a rule, the process of obtaining financing is quite simple, however, you should pay attention to the interest rate and loan conditions before applying.
Common Examples Of Installment Loans
Now lenders offer a huge number of different Installment Loans, which are suitable to cover certain needs. Below you can explore the most popular of them:
- Mortgage. A Mortgage is a type of financing that allows you to get financing to buy a home. So with a Mortgage, you borrow the value of the house and pay it off with regular monthly interest and payments, often 15 to 30 years. It is important to note that in this case the loan will be secured by your home. Thus, if you miss payments for a long time, you may lose it.
- Personal Loan. Unlike many other types of loans, a Personal Loan is a type of loan that can be used to meet almost any personal need. You can receive up to $100,000 and pay it back in regular monthly installments for a period of two to seven years. Lenders provide Personal Loans based on your personal information such as credit history, income, outstanding debts, and more. Most Personal Loans are unsecured, which means no collateral is required for approval.
- Auto Loan. Another popular example of Installment Loan is the Auto Loan, where you borrow the cost of a car and pay it back in regular monthly installments. As a rule, terms vary from two to five years. However, this type of financing is also secured, so if you miss payments, you risk losing your car.
Do Installment Loans Require Credit Check?
Since many borrowers have made mistakes and missed payments in the past, each of them wants to know if they are eligible for an Installment Loan and if it is possible to get approval without a credit check.
In fact, it can be quite difficult to find a lender who offers an Installment Loan with no credit check, as this is what helps the lender decide whether to approve the application. However, it is important to pay attention to the fact that there are now a large number of lenders who do not require the borrower to have a good or excellent credit history. This way you can get approved for an Installment Loan even with a bad credit history and cope with all your needs.
No Credit Check Installment Loan Eligibility Criteria
Eligibility criteria for an Installment Loan may vary depending on the type of loan, the lender chosen, and the laws of the state where you live. However, below you can explore the basic requirements that you will most likely have to meet:
- Age. Only people who are 18 years of age or older are eligible to apply for funding.
- Citizenship. You must be a US citizen or legal resident to be eligible for an Installment Loan.
- Income. You must have a regular monthly source of income and be able to confirm it.
- Bank account. Many lenders also require you to have an active bank account in order to transfer the deposit directly to it.
- ID confirmation. You can provide government issued ID, passport and driver’s license
- Contact details. To contact you, the lender will need contact information such as phone and e-mail.
How Can Installment Loan Affect Your Credit?
You probably know that applying for an Installment Loan most often requires a hard credit check, which can temporarily lower your credit score. However, how will the payment of the Installment Loan affect your credit?
Installment lenders report your payments to at least one of the three credit bureaus. Since your payment history makes up 35% of your FICO score, it’s important to make regular monthly payments. Thus, if you pay off your loan with interest on time, your credit history will improve. However, if you miss payments, then an Installment Loan can damage your credit quite a lot.
Therefore, make sure that you can actually repay the amount with interest before you apply for Installment Loans.