Finding the very best loan is not an easy task, especially when you are in a limited situation in terms of your creditworthiness. Those people who have very high credit scores can choose from the best loans and credit cards, while those with lower scores have to make do with what is on offer.
If you do have a low credit score, you will be happy to know that some good options do exist. And, for US readers, there are some Ohio installment loans on the market that can help you when you are experiencing a financial crisis. These installment loans are available online, and they are very easy to obtain.
Understanding Installment Loans
One of the most significant advantages of such installment loans or payday loans is that you do not have to get a credit check. That means a person who has no credit history or has a very low score, can still qualify for one of these loans. So long as you have a bank account and job, you are a candidate to borrow money.
The terms on these loans are favourable, considering your situation, but they are not as attractive as the options available to people with high credit scores. You will see loan offers with interest rates that are a lot higher than a typical loan, but you should not necessarily be too concerned.
Terms for Installment Loans
The reason why a high-interest rate is necessary for such installment loans is because you are not getting a credit check. The lender has no way of knowing whether you are a trustworthy candidate for the loan. They can only hope you will pay back the money, which means the higher interest rate is necessary to mitigate against risk.
Most of these installment loans can be repaid very quickly. The reason why you should not be too concerned about the high-interest rate is because it will not have much time to accumulate against the principal balance.
Say you are borrowing $500 and the APR on the loan is 300%. If you were to borrow that money and pay it back in a year, you would be worried about the interest rate. Those who pay back the loan within a month will not be seeing more than $10 or $20 in total interest payments, on top of the principal balance they owe.
Using Loans in a Time of Need
The reason why these loans exist is that people need money to escape financial hardship. Say you are without a job for a few months, and you have run through your savings. You recently found a new job, but you do not get paid for another few weeks.
Rather than waiting those few weeks and letting more bills accumulate, or rent go unpaid, you can use the installment loan to make things right financially. Then you can use your next paycheck to ensure the debt is paid.
These loans can be a lifesaver when used in the correct circumstances. You have to ensure you are not misusing these loans, which includes borrowing money for frivolous and unnecessary spending.
Take Steps to Fix Your Finances
There is nothing wrong with borrowing money using an installment loan once in a blue moon. You went through a tough time and needed help. Do not let it become a habit, as it means you are constantly cycling between having some money in the bank and being in debt.
Take steps to improve your financial outlook. These steps include proper budgeting, saving money each month, and improving your credit score. When you take these steps, you will know that you are in a much better position moving forward.
Easy Way to Boost Your Credit Score
One of the most simple and effective ways to boost your credit score is to take out a secured credit card. These are cards where you put down a deposit of $300 to $400 and then get a credit line of the same amount.
So long as you pay off the entire balance on the card at the end of each month, you will get positive reports to credit agencies from the card company. That improves your credit score, and within 12 to 24 months, you could have a very respectable score.
Using installment loans when you are in your moment of greatest financial need is a good decision. The loan will help you make good on your financial obligations, and then you can use your next paycheck to repay the loan within a few weeks.