Typical Rates And Terms
Rates and terms for installment loans can vary greatly, depending on the lender you borrow from and the terms of your specific loan –which may often be based on certain underwriting guidelines. The key is to be thorough in your search and explore all options, ensuring that you get the best deal possible on both the rate and term in a way that meets your financial needs.
In terms of term, this is a short-term product, so the terms are still often shorter than other loans, such as car loans and mortgages. While car loans and mortgage technically are “installment loans” by definition (Set payment and amortization schedule, with a set payoff date.), we are specifically looking at cash lenders who provide short-term installment loans. In most cases, your installment loan term will range anywhere from a few months to a couple of years in length. The term lengths are set based on a number of factors, including the lender’s standard payment term lengths, underwriting, loan amount, etc.
Rates and fees can vary greatly as well. In most cases, your interest rate (or the percentage rate representing your fees and charges) will be less than that of a payday loan, but more than other typical installment loans, such as car loans and mortgages. That said, if you are able to get a short-term installment loan through a local bank, you would likely receive a rate that is significantly less than the rates you would receive if you were to get a similar type of loan through a payday company who also offers installment loans. The catch is that it is typically much harder to get an installment loan through a bank or credit union as they have more thorough and stringent underwriting guidelines and requirements.